Michael W. Peregrine is a partner at McDermott Will & Emery LLP. This post is based on his McDermott Will & Emery memorandum.
The US Department of Justice’s (DOJ’s) new policy on corporate fraud enforcement and individual accountability is a significant development around risk, and corporate directors should be aware.
As Deputy Attorney General Lisa O. Monaco announced on October 28, the new policy represents a return to the stricter enforcement posture of the administration of Barack H. Obama. In that regard, the policy has implications for board oversight of the corporate legal function and will likely affect how boards evaluate risk and oversee the effectiveness of compliance and ethics programs.
According to Monaco, this shift in enforcement policies reflects the confluence of three developments: the increasing national security dimension associated with corporate crime, the dramatically increased role that data analytics is playing in corporate criminal investigations, and criminals’ interaction with emerging companies in the technology and financial sectors in a way that exploits the investing public. The DOJ’s overarching goal is to “protect jobs, guard savings, and maintain our collective faith in the economic engine that fuels this country,” Monaco said.
The leading theme of the new policy is its unambiguous prioritization of individual accountability in corporate criminal matters. This translates, in part, to a reminder for federal prosecutors to concentrate on individual accountability—at every level of the corporate hierarchy—from the beginning of a criminal investigation.
