DOJ Announces Voluntary Self-Disclosure Policy

My colleagues have released an excellent update on the DOJ’s recently announced corporate enforcement and voluntary self-disclosure policy.  For a long time, the Department of Justice has encouraged self-disclosure, at times suggesting companies will be treated better if they do, but no guarantees. For the first time, they’ve formalized a policy, and companies should take note and be ready to seriously consider the self-disclosure option when reviewing compliance challenges.

In their update, my colleagues comment:

The new Policy is a marked shift in tone even from DOJ’s prior corporate compliance guidelines. Just two years ago, DOJ initiated a pilot disclosure program meant to incentive corporate disclosure. This goes much further, offering the potential of a “public” declination in the event of disclosure absent aggravating circumstances. In the “carrot versus stick” analogy, DOJ is strongly emphasizing “carrot”-based incentives for self-disclosure, cooperation, and remediation.

Given DOJ’s focus on self-disclosure, companies should consider proactively reviewing and assessing their internal compliance programs—particularly whistleblower ethics hotlines. The Policy encourages self-disclosure at the “earliest possible time,” which may potentially include disclosure before an issue has been fully investigated. The sooner a company can learn about an issue, the sooner it can alert DOJ to any potential wrongdoing. If a company must self-disclose an issue, it should also be prepared to fully cooperate with the DOJ during the investigative or prosecutorial phases of a DOJ matter. The DOJ has indicated that it will likewise cooperate with companies to remediate wrongful conduct. Indeed, the head of the Criminal Division at DOJ, Matthew R. Galeotti has noted, “[w]e want to hear from you… Now is the time to report, remediate, and strengthen compliance to ensure American prosperity.”