John F. Savarese, Wayne Carlin and David B. Anders are partners at Wachtell, Lipton, Rosen & Katz. This post is based on a Wachtell Lipton memorandum by Mr. Savarese. Mr. Carlin, Mr. Anders, Ralph Levene and Jonathan Moses.
Introduction
The main takeaway from white-collar and regulatory enforcement activity in 2019, which we believe will remain true through 2020, is that both the DOJ and SEC have become more transparent about the requirements for receiving corporate cooperation credit. Last year’s experience shows that the government’s pronouncements about the credit it will extend to exemplary companies are not mere window-dressing, but are instead backed up with significant reductions in fine and penalty amounts, as well as outright declinations in cases where a company satisfies the government’s stated expectations concerning self-detection, self-reporting, cooperation and remediation.
Cases brought against individual corporate officers also continued apace in 2019, in keeping with the government’s oft-stated commitment to ensuring that individual wrongdoers, and not just their corporate employers, are held responsible. Indeed, last month, Assistant Attorney General Benczkowski stressed that “[s]o far this year, the Fraud Section has brought charges against more than 440 individuals, which is an all-time high that will only increase through the close of the year.” One consequence of this trend, as we discuss below, is that because individuals frequently take cases to trial, unlike corporations which almost always settle, the government has suffered some high-profile losses. We expect this trend to continue in 2020.