The Justice Department released a refreshed set of guidelines on how prosecutors should evaluate corporate compliance programs.
The Principles of Federal Prosecution of Business Organizations in the United States Attorney’s Manual describe factors that prosecutors should consider in conducting an investigation of a corporate entity, determining whether to bring charges, and negotiating plea or other agreements. One of these factors is “the existence and effectiveness of the corporation’s pre-existing compliance program” and the corporation’s remedial efforts “to implement an effective corporate compliance program or to improve an existing one.” The Guidelines are meant to assist prosecutors in making informed decisions as to whether, and to what extent, the corporation’s compliance program was effective.
For those of us involved in compliance for high-regulated companies in finance, I take the guidance with a word of caution. Regulators are the first line of compliance program creation. If you screw up badly, they pull in the agency’s lawyers. It’s only when you end up in the super serious list, like criminal charges, that you end up with the Department of Justice where these Guidelines are operative.
So what has changed in the Guidelines document?
It’s bigger. The original guidance was only four pages. The new guidance blossoms up to 19 pages.
It’s written for non-compliance people. The previous guidelines were written more like a checklist for those with a compliance background. I heard the new guidelines were released in a training session for DOJ attorneys. I guess it will be the front-line prosecutors using these guidelines to help in their decision-making process.
I need to take a deeper dive into the guidelines. More to come.
Sources:
- Evaluation of Corporate Compliance Programs Guidance Document Update April 2019
- New Compliance Evaluation Guidelines by Matt Kelly in Radical Compliance
- Copy of the 2017 Guidance courtesy of Matt Kelly