DOJ is changing how it prosecutes companies and could put more executives in jail

The United States Department of Justice (DOJ) crest is seen at its headquarters in Washington, DC, United States, May 10, 2021.

andrew kelly | Reuters

Significant changes are coming to how federal prosecutors will handle white-collar criminal cases, placing greater emphasis on prosecuting individual executives who commit fraud, a senior Justice Department official said Thursday.

The DOJ is changing the incentive structure for companies that negotiate with the government on cases of corporate wrongdoing, according to the official. The government will give credit to companies that provide information and the names of individual leaders involved in criminal activity, the official said.

“The timeliness of information about key individuals will be a key metric for prosecutors judging the credit companies get for their cooperation,” the official said. “If the company comes forward, people can go to jail, and that’s the intent here. But the company itself, on behalf of its shareholders, can avoid a guilty plea.”

The department will also make it much harder for companies to secure successive non-prosecution agreements. Now, prosecutors will assess all of a company’s past behavior when making decisions about resolutions.

“Historically, there was concern that some companies viewed resolutions with the Department of Justice as a cost of doing business and believed there was a possibility of multiple successive non-prosecution agreements or deferred prosecution agreements,” the manager said. “We are trying to send a message that is not the case.”

And the DOJ is also going to emphasize clawbacks of executive compensation, so that the executives who committed the fraud pay a price, not just company shareholders when a company foots the bill for a fine. .

New rules are also expected on corporate compliance checkers, who are often tasked with ensuring companies stay on their best behavior after misconduct.

Deputy Attorney General Lisa Monaco will unveil the new policies during a speech at New York University on Thursday evening.

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