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At an event at New York University, Deputy Attorney General Lisa
Monaco said the DOJ will make it harder for companies to enter
into multiple settlements that defer or waive prosecutions, and
that it would try to reward companies that claw back executive
compensation after learning of misconduct.
The change would "shift the burden of corporate financial
penalties away from shareholders — who frequently play no role
in misconduct — onto those who are more directly responsible,"
Monaco said, adding that the DOJ would develop more detailed
guidance about the rewards by the end of the year.
Companies that voluntarily report misconduct and cooperate with
investigators will not be required to plead guilty in most
cases, Monaco said, sparing them hefty fines. She described the
plan as a "carrots and sticks" approach to let companies'
lawyers make a "business case" for strong compliance.
Democratic President Joe Biden's Justice Department has
toughened its stance toward corporate offenders. White-collar
prosecutions fell to an all-time low under former President
Donald Trump's Republican administration.
In October, the Justice Department issued new rules requiring
companies to name all people involved in misconduct in order to
receive credit for cooperation, and required prosecutors to
consider a company's full record when deciding how to resolve a
probe.
Since Biden took office, federal prosecutors have brought
racketeering charges against the founder of Archegos Capital
Management over the $36 billion firm's meltdown, and have
secured a guilty plea from a unit of Allianz SE for fraud over
the collapse of some investment funds.
Under the new policy on settlements, DOJ leadership must approve
any company's second non-prosecution or deferred prosecution
agreement, Monaco said. Those deals let companies escape
criminal prosecution in exchange for fines and promises of
better behavior.
Between 10% and 20% of all significant corporate criminal
resolutions involve repeat offenders, Monaco said.
(Reporting by Luc Cohen in New York; Editing by Aurora Ellis and
David Gregorio)
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