On Wednesday, the DOJ announced a new Voluntary Self-Disclosure Policy, which sets out the criteria for determining when a company is deemed to have made a voluntary self-disclosure of misconduct to a US Attorney’s Office and how the company might benefit from a “resolution under more favorable terms.” According to the press release, the policy is intended to provide “transparency and predictability to companies and the defense bar concerning the concrete benefits and potential outcomes in cases where companies voluntarily self-disclose misconduct, fully cooperate, and timely and appropriately remediate. The goal of the policy is to standardize how VSDs are defined and credited by USAOs nationwide, and to incentivize companies to maintain effective compliance programs capable of identifying misconduct, expeditiously and voluntarily disclose and remediate misconduct, and cooperate fully with the government in corporate criminal investigations.”
As described in the press release, to be considered a VSD, a company’s disclosure must be made “before that misconduct is publicly reported or otherwise known to the DOJ,” must include “all relevant facts known to the company about the misconduct,” and must be made “to a USAO in a timely fashion prior to an imminent threat of disclosure or government investigation.” The company must also satisfy the other requirements of the policy, including “fully cooperating and timely and appropriately remediating the criminal conduct (including agreeing to pay all disgorgement, forfeiture, and restitution resulting from the misconduct).” If the company fully satisfies all of the requirements described in the policy—unless there is an “aggravating factor”— the company “will receive significant benefits, including that the USAO will not seek a guilty plea; may choose not to impose any criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the United States Sentencing Guidelines (USSG) fine range; and will not seek the imposition of an independent compliance monitor if the company demonstrates that it has implemented and tested an effective compliance program.”
There are three “aggravating factors” identified in the policy: “(1) if the misconduct poses a grave threat to national security, public health, or the environment; (2) if the misconduct is deeply pervasive throughout the company; or (3) if the misconduct involved current executive management of the company.” The presence of an aggravating factor “may warrant a USAO seeking a guilty plea even if the other requirements of the VSD policy are met.” However, a guilty plea is not automatic; “instead, the USAO will assess the relevant facts and circumstances to determine the appropriate resolution. If a guilty plea is ultimately required, the company will still receive the other benefits under the VSD policy, including that the USAO will recommend a criminal penalty of at least a 50% and up to a 75% reduction off the low end of the USSG fine range, and that the USAO will not require the appointment of a monitor if the company has implemented and tested an effective compliance program.”
