The Compliance Monitor Dilemma

April 3, 2017 Published Work
New York Law Journal, Volume 257, No. 62

The U.S. Department of Justice continues to churn out policies and guidance reflecting the view that it is not merely looking to punish companies for their employees' misdeeds, but to help the companies get better quicker.

Whether viewing the Fraud Section's recent "Evaluation of Corporate Compliance Programs"1 or the National Security Division's "Guidance on Voluntary Self-Disclosures,"2 the message is much the same: the Justice Department isn't just focused on deterrence and accountability, but is becoming more interested in ensuring that companies implement effective compliance programs to prevent and detect future misconduct. While these principles have long been ensconced in Chapter Eight of the U.S. Sentencing Guidelines, the subtle but growing focus on corporate get well programs fits hand-in-glove with the Yates Memo's unstated raison d'etre:3 Corporate penalties often fail to hit those who deserve it most.

The DOJ's growing interest in corporate compliance dovetails with the burgeoning trend, in both criminal and administrative enforcement actions, favoring the appointment of external corporate compliance monitors. What better way to ensure that a company stay on track than to embed an independent monitor at headquarters to oversee the company's progress? But not so fast, at least according to Walmart, which is reported to have recently rejected a DOJ settlement offer and taken a "not in my house" approach to DOJ's insistence on an external monitor.4

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1. U.S. Dep't of Justice, Criminal Division, Fraud Section, Evaluation of Corporate Compliance Programs (Feb. 8, 2017), https://www.justice.gov/criminal-fraud/page/file/937501/download. See also U.S. Dep't of Justice, Criminal Division, Fraud Section, "New Compliance Counsel Expert Retained by the DOJ Fraud Section" (Nov. 3, 2015), https://www.justice.gov/criminalfraud/file/790236/download.

2. U.S. Dep't of Justice, National Security Division, Guidance Regarding Voluntary Self-Disclosures, Cooperation, and Remediation in Export Control and Sanctions Investigations Involving Business Organizations (Oct. 2, 2016), https://www.justice.gov/nsd/file/902491/download.

3. U.S. Dep't of Justice, Office of the Attorney General, Individual Accountability for Corporate Wrongdoing (Sept. 9, 2015), https://www.justice.gov/dag/file/769036/download.

4. Joann S Lublin, Aruna Viswanatha & Sarah Nassauer, "Obstacles Remain in Talks to Settle Wal-Mart Bribery Probe," Morningstar (Jan. 27, 2017), https://www.morningstar.com/news/dow-jones/us-markets/TDJNDN_201701278855/obstaclesremain-in-talks-to-settle-walmart-bribery-probe.print.html.

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