The US Department of Justice (DOJ) coat of arms is on display at their headquarters in Washington, DC, US, May 10, 2021.
Andrew Kelly | Reuters
Significant changes are coming to the way federal prosecutors will handle white-collar criminal cases, placing greater emphasis on individual executives who commit fraud, a senior Justice Department official said Thursday.
DOJ is changing the incentive structure for companies that negotiate with the government about cases of corporate misconduct, the official said. The government will give credit to companies that come forward with information and names of individual executives involved in criminal activity, the official said.
“Timeliness for key person information will be an important measure for prosecutors assessing the credit companies they receive for their cooperation,” the official said. “If the company comes forward, people can go to jail, and that’s the intention here. But the company itself can avoid pleading guilty on behalf of its shareholders.”
The department also plans to make it much more difficult for companies to get consecutive no-prosecution agreements. Now prosecutors will weigh the full range of a company’s past behavior when making decisions about resolutions.
“Historically, there has been concern that some companies would view resolutions with the Department of Justice as a cost of doing business and believe there was a possibility of multiple successive non-prosecution agreements or deferred prosecution agreements,” the official said. “We’re trying to send a message that’s not the case.”
And the DOJ is also going to focus on executive compensation recoveries so that the directors who committed the fraud pay a price, not just the company’s shareholders when a company pays the bill for a penalty.
New rules are also expected for corporate compliance monitors, which are often tasked with ensuring that companies continue to behave their best after misconduct.
Deputy Attorney General Lisa Monaco will unveil the new policy Thursday evening at New York University.