The DOJ recently took another step to encourage corporate self-disclosure for FCPA violations through the announcement of a new FCPA Enforcement Policy based on the eighteen month FCPA Pilot Program.  The DOJ’s Pilot Program proved to be successful—the FCPA Unit received over 30 voluntary disclosures in the 18-month period the Pilot was in place—compared to only 18 voluntary disclosures in the previous 18-month period, according to Deputy Attorney General Rosenstein.  The new Enforcement Policy contains many of the same incentives as the Pilot Program, with a few added benefits to sweeten the deal for corporations hoping to avoid hefty FCPA fines.

Presumption of Declination. Building on the cooperation credit offered under the Pilot Program—and barring aggravating circumstances—corporations will receive a presumption that the DOJ will resolve the case through a declination if they 1) voluntarily self-disclose; 2) fully cooperate; and 3) timely and appropriately remediate.  The Enforcement Policy delineates the DOJ’s expectations as to each of these requirements, many of which track the Pilot Program.  Evaluation of compliance programs, for example, will vary depending on the size and resources of a business and includes factors such as fostering a culture of compliance; dedicating sufficient resources to compliance activities; and ensuring that experienced compliance personnel have appropriate access to management and to the board.
Continue Reading DOJ Highlights Disclosure Incentives Under New FCPA Enforcement Policy

At the annual Food Safety Summit in Rosemont, Illinois, the Department of Justice’s increased focus on food safety enforcement was a key topic of discussion. While it was quite clear that the DOJ’s increased enforcement activity in high-profile food contamination cases involving companies such as Dole Foods and Chipotle Mexican Grill in 2016 caught the

In a controversial ruling, London’s High Court has held that interview notes and other documents created by outside legal counsel and forensic accountants as part of an internal investigation into foreign bribery allegations are not protected by the legal professional privilege.  While the appeals process is already underway, the May 8th decision by the Honourable Mrs Justice Andrews is a noteworthy victory for the U.K.’s Serious Fraud Office (SFO), an agency akin to the U.S. Department of Justice (DOJ).

Eurasian Natural Resources Corporation (ENRC), the U.K. division of a multinational mining conglomerate operating in the Middle East and Africa, is the subject of an ongoing SFO criminal investigation. At times, ENRC appears to have been in a cooperation posture with the SFO; but earlier this year, the SFO filed a petition seeking to force ENRC to produce documents the company claimed were privileged.  The London High Court agreed with the SFO, ruling that almost all of the documents at issue were not privileged and should be disclosed to the SFO.
Continue Reading U.K. Court Orders Disclosure of Internal Investigation Documents to Criminal Prosecutors

The U.S. Department of Justice (“DOJ”)’s Criminal Fraud Section recently issued guidance for corporate compliance programs in a document titled Evaluation of Corporate Compliance Programs (“Fraud Section Guidance”), which reflects a number of notable differences from prior guidance on similar issues. The Fraud Section Guidance contains a list of topics and questions used by the Fraud Section in evaluating corporate compliance programs. As several commentators have noted—and the Fraud Section acknowledges—many of the topics contained in this recent guidance are consistent with, among other things, the Resource Guide to the U.S. Foreign Corrupt Practices Act (“FCPA Guide”) and the current U.S. Sentencing Guidelines, both of which outline desired aspects of a corporate compliance program “best practices.” But it is the differences—areas where the DOJ has expanded on prior commentary—that may provide key insights into DOJ areas of concern.

Specifically, the Fraud Section Guidance provides more detail than prior guidance on three key topics, thereby providing companies with a roadmap for how to strengthen their compliance programs—at least from a DOJ perspective—through increased focus on (1) compliance functions, (2) training programs, and (3) testing of compliance programs.
Continue Reading Has the DOJ Perspective on Corporate Compliance Evolved?: Three Ways the DOJ’s Recent Guidance Differs from the FCPA Resource Guide and U.S. Sentencing Guidelines

President Donald Trump’s nominee for chairman of the U.S. Securities and Exchange Commission, Jay Clayton, testified before the Senate Banking Committee during his confirmation hearing on March 23, 2017.  In this two-part series, we recap the highlights of Clayton’s testimony regarding potential enforcement priorities and policy changes.

READ PART ONE HERE

The month of March has brought with it the first-ever criminal municipal bond securities fraud conviction, the resolution of enforcement actions targeting banks and senior executives accused of shirking duties to oversee municipal bond issuances, and proposed rule amendments intended to improve municipal securities disclosures—continuing a trend of intensified regulatory enforcement that targets industry “gatekeepers” such as auditors, bond underwriters, and others that serve investor clients entering the municipal bond market.   
Continue Reading March Madness in the Municipal Bond Market – A Focus on Gatekeepers

For many corporate executives in the food industry, the U.S. Department of Justice (DOJ’s) increasing focus on prosecuting “responsible corporate officers” under the criminal misdemeanor provision of the Food, Drug, and Cosmetic Act (FDCA) has warranted rapt attention, particularly in light of criminal investigations arising from nationwide contamination outbreaks at companies like ConAgra and Blue Bell Creameries.  Recent remarks by attorneys from the DOJ’s Consumer Protection Branch to industry audiences have underscored the government’s expectation that corporate food executives implement a “culture” of food-safety compliance in their companies, and provide timely, truthful responses to both formal and informal inquiries made by regulators at the Food & Drug Administration (FDA).

In December 2016, Principal Deputy Assistant Attorney General Benjamin Mizer addressed the Food and Drug Law Institute’s Enforcement, Litigation and Compliance Conference, reiterating the DOJ’s ability and determination to bring criminal charges in cases where companies sell contaminated products to consumers.  Separately, in remarks to the United Fresh Produce Association in September 2016, DOJ Assistant Director Jeffrey Steger provided a regulator’s viewpoint regarding several concrete ways that food companies can demonstrate their commitment to safety compliance.
Continue Reading DOJ Officials Offer Guidance for Food Company Execs Looking to Minimize Criminal Exposure

The air of uncertainty was palpable as current and former members of the U.S. Securities and Exchange Commission’s (SEC) Division of Enforcement spoke at the Securities Regulation Institute’s 44th Annual Conference in Coronado, California earlier this week.  Important questions went largely unanswered about the impact of the recent resignations of both SEC Chair Mary Jo White and Enforcement Director Andrew J. Ceresney, and the future direction of the enforcement program under the new presidential administration and proposed SEC Chair Jay Clayton.  SEC Enforcement staff in attendance steered clear of prognostications, and instead used the conference as an opportunity to reiterate the agency’s ongoing enforcement initiatives and successes from the past year.
Continue Reading Uncertainty Looms Over SEC Enforcement Staff

Mexico’s new anti-corruption system, which was signed into law by President Enrique Peña Nieto on July 18, 2016, builds on constitutional reforms passed in May 2015 and is designed to increase oversight of public officials to deter corruption at all levels of the Mexican government. The laws establish new responsibilities and stricter penalties applicable to public servants and all private parties (domestic and foreign) doing business in Mexico, and for the first time in Mexican legal history, applies to companies and the officers, directors, and employees acting on their behalf.  Coupled with last week’s unsealing of U.S. Department of Justice (DOJ) charges against six individuals who pleaded guilty in an aviation bribery scheme—including two Mexican public officials—Mexican government officials and corporate actors appear to be situated squarely within the enforcement cross-hairs of both U.S. and Mexican anti-corruption authorities as 2017 begins.
Continue Reading Anti-Corruption Scrutiny in Mexico Expands

On April 29, 2016, Dole Foods Company announced that the Department of Justice (DOJ) had launched an investigation concerning listeria outbreaks at certain Dole plants.  The investigation comes on the heels of a number of high profile DOJ probes into outbreaks of food-related illnesses, most recently Blue Bell Creameries, and continues the DOJ’s recent trend towards aggressive pursuit of food safety violations and criminal charges against corporate executives.

The federal Food, Drug, and Cosmetic Act (FDCA) creates a strict liability criminal offense arising from the introduction of adulterated food into interstate commerce.  The DOJ may elect to pursue misdemeanor or felony charges based on the nature and seriousness of the violation and the scope of the outbreak.  If the outbreak is a first-time offense or is the result of an unintentional violation, then the DOJ is more likely to pursue misdemeanor charges.  If, on the other hand, the company responsible for the outbreak has repeatedly violated the FDCA or has introduced the adulterated food intentionally or knowingly, the DOJ has not hesitated to bring felony charges.  Importantly, both companies and individual executives may face liability for outbreaks, and company executives may be held vicariously liable and face criminal charges even if they were unaware of the contamination.
Continue Reading DOJ’s Focus on Food Safety and Corporate Executives