John F. Savarese, Ralph M. Levene, and David B. Anders are partners at Wachtell, Lipton, Rosen & Katz. This post is based on a Wachtell Lipton memorandum by Mr. Savarese, Mr. Levene, Mr. Anders, Marshall Miller, and Michael Nance.
[In April 2019], Assistant Attorney General Brian Benczkowski of DOJ’s Criminal Division announced newly updated guidance for white-collar prosecutors, identifying factors to be considered in evaluating corporate compliance programs. The update both expands upon guidance first issued in February 2017 and aims to harmonize that guidance with DOJ’s principles for corporate prosecution. This guidance represents the latest development in DOJ’s broader effort—on which we previously reported in March, July, and twice in October of last year—to promote predictability and transparency in white collar enforcement and to clarify the benefits of a responsible corporate approach to misconduct, in this case through maintenance of a robust and effective corporate compliance program. All responsible companies should pay close attention to the key lessons signaled in this new DOJ guidance.
The updated guidance, a restructured and more detailed version of its predecessor, is organized into three parts, tracking the “fundamental questions” DOJ’s Justice Manual directs prosecutors to ask in assessing corporate compliance programs: (1) Is the compliance program well designed? (2) Is it implemented earnestly and in good faith? (3) Does it work in practice? The answers to these questions—as fleshed out by the many topics and subtopics identified in the guidance—will guide DOJ prosecutors as they consider whether companies under investigation will receive a declination or be prosecuted, the size of any monetary penalties that may be imposed, and whether to require a compliance monitor as part of a negotiated resolution.