DOJ publishes voluntary self-disclosure policy for corporations

The voluntary self-disclosure policy, setting a “nationwide standard” for all U.S. attorney’s offices (USAOs), is effective immediately, the lead prosecutors from the Southern District of New York and Eastern District of New York announced Wednesday in a press release.

The new policy provides companies with incentives to voluntarily self-disclose corporate misconduct before “imminent threat of disclosure or government investigation.”

The DOJ will not consider a disclosure voluntary “where there is a preexisting obligation to disclose, such as pursuant to regulation, contract, or a prior department resolution (e.g., nonprosecution agreement or deferred prosecution agreement),” the policy said.

Voluntary disclosures must also be timely; that is, “within a reasonably prompt time after the company becoming aware of the misconduct, with the burden being on the company to demonstrate timeliness.”

Potential benefits to voluntary self-disclosure include the DOJ:

• Not seeking a guilty plea for the misconduct;
• Not imposing a criminal penalty;
• Not imposing a penalty greater than 50 percent below the low end of federal sentencing guidelines for the misconduct at issue; and/or
• Not imposing a compliance monitor as part of the settlement.

To qualify for the potential benefits, companies must fully cooperate with DOJ investigators, including providing all relevant information known at the time. Businesses must “move in a timely fashion to preserve, collect, and produce relevant documents and/or information and provide timely factual updates to the USAO. Should the company conduct an internal investigation, the USAO expects appropriate factual updates as that investigation progresses,” the policy stated.

A company must also remediate the misconduct at hand, including creating and/or strengthening its compliance program to prevent future misconduct.

Despite voluntarily disclosing misconduct, a company might not receive the benefits of the new policy if the misconduct is found to pose “a grave threat to national security, public health, or the environment”; is “deeply pervasive throughout the company”; or “involved current executive management of the company,” the policy said.

The policy is based on a September 2022 directive from Deputy Attorney General Lisa Monaco, known as the Monaco Memo, which laid out revisions to the DOJ’s corporate criminal enforcement policies. Several DOJ officials have outlined the new policy in speeches and statements since then, including Assistant Attorney General Kenneth Polite Jr. in January.