February 24, 2023
DOJ Announces Voluntary Self-Disclosure Policy for U.S. Attorney’s Offices
On Wednesday, the Department of Justice announced a new corporate voluntary self-disclosure (VSD) policy that is applicable to all 94 U.S. Attorney’s Offices in the U.S. and its territories. The purpose of this new policy is to encourage companies to voluntarily self-disclose misconduct to U.S. Attorney’s Offices, fully cooperate in investigations, and timely and appropriately remediate misconduct by providing incentives such as avoidance of a guilty plea, substantially reduced fines, and no independent compliance monitor. As this MoFo alert notes:
The new U.S. Attorney’s Office VSD policy comes in addition to the DOJ Criminal Division’s Corporate Enforcement Policy (CEP), which was implemented in 2017 and recently revised. Unlike the CEP, the U.S. Attorney’s Office VSD policy applies to all U.S. Attorney’s Offices, not just the Criminal Division. Notably, while the U.S. Attorney’s Office VSD policy has much in common with the CEP, it differs in several key respects, including whether prosecutors will presumptively decline to prosecute a compliant company and whether any fine reductions are available for companies that fully cooperate and remediate but do not self-disclose misconduct.
The U.S. Attorney’s Office VSD policy is a fulfillment of a September 2022 directive by Deputy Attorney General Lisa Monaco directing all DOJ components to implement a VSD policy. This directive is part of an overall push by DOJ to re-invigorate corporate criminal enforcement by encouraging companies to bring possible wrongdoing to DOJ’s attention to jump start criminal investigations.
Over the years, I have found that the decision to self-disclose is always a very complicated one, requiring a very careful weighing of the potential benefits to be received versus the unpredictable outcomes of handing an investigation and potential action to the DOJ and/or the SEC. At least this new VSD policy provides some clarity and uniformity as to how U.S. Attorney’s Offices will approach self-disclosure situations.
– Dave Lynn