Corporate Executives - Beef Up Your Legal Teams

Deputy AG Lisa Monaco, speaking at the 36th ABA White Collar Crime Institute discussed three areas:

"I have three priorities for my time with you. First, I want to describe three new actions that the department is taking today to strengthen the way we respond to corporate crime. Second, I want to look forward and tell you about some areas we will be studying over the next months, with an eye to making additional changes to help further invigorate the department’s efforts to combat corporate crime. But before both of those, I want to set the scene by discussing trends, as well as the Attorney General’s and my enforcement priorities, when it comes to corporate crime."

Three very telling observations set the stage for the new enforcement policy and the challenges faced:

Corporate crime has an increasing national security dimension — from the new role of sanctions and export control cases to cyber vulnerabilities that open companies up to foreign attacks. Second, data analytics plays a larger and larger role in corporate criminal investigations, whether that be in healthcare fraud or insider trading or market manipulation. Third, criminals are taking advantage of emerging technological and financial industries to develop new schemes that exploit the investing public.

But she notes that these changes have been "changes of degree and not of kind."

DOJ clearly intends to focus on individuals ("Accountability starts with the individuals responsible for criminal conduct.").  And they intend to put money there ("We are also going to find ways to surge resources to the department’s prosecutors. As one example, a new squad of FBI agents will be embedded in the Department’s Criminal Fraud Section.")

The three changes will be:

• "companies must provide the department with all non-privileged information about individuals involved in or responsible for the misconduct at issue"  & "no longer be sufficient for companies to limit disclosures to those they assess to be “substantially involved” in the misconduct"
• "all prior misconduct needs to be evaluated when it comes to decisions about the proper resolution with a company, whether or not that misconduct is similar to the conduct at issue in a particular investigation." -  companies who have veered from a DPA or NPA may have issues here
• Monitors are back in

And finally - there will be a Corporate Crime Advisory Group - so it looks like the implementation of these changes are forthcoming.

With recidivism a focus on the prosecution of corporate crime, we may be seeing a lot more scrutiny of prior DPAs and NPAs.  

(esp)