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Business Crimes BulletinFeaturesRegulationWhite Collar Crime

The Criminal Division's Enforcement Policy: What's New for Companies Deciding Whether to Voluntarily Disclose?

By Jacqueline C. Wolff
March 01, 2023

In 1979, the Department of Justice (DOJ) announced a new policy under which companies that voluntarily disclosed violations of the then newly enacted Foreign Corrupt Practices Act of 1977 (FCPA) would be treated more leniently than those that did not come forward. Since then, the DOJ has attempted to encourage companies to voluntarily disclose all manner of criminal misconduct beyond violations of just the FCPA, while general counsels worldwide have been wrestling with the question of whether and when it is in the company's best interest to so disclose.

Is it better to conduct an investigation, remediate the problem, discipline the wrongdoer, beef up the company's compliance program and stay silent, keeping the company out of the DOJ's crosshairs and the spotlight of the media? Or is it better to take the high road of the good corporate citizen and self-report, knowing that it could result in a sharp drop in the stock price, the filing of shareholder suits, bad publicity and — if the disclosure was not to the DOJ's satisfaction — criminal charges? Even publicly traded companies that have regulatory disclosure obligations find themselves having to wrestle with these issues when the misconduct does not necessarily rise to the level of a material event. Prior guidances by the DOJ — usually announced by the Deputy Attorney General (DAG) — provided some assistance, but not enough.

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