Additional authors: Thomas Suddath, Kate Seikaly, Evan Barr, A. Scott Bolden, James Sanders, Francisca Mok & Anthony Todd
On February 22, 2023, the Department of Justice (DOJ) announced a new voluntary self-disclosure (VSD) policy. The VSD policy creates a new national standard for how U.S. Attorney’s Offices (USAO) define and credit voluntary self-disclosure, cooperation, and remediation. The VSD policy follows Deputy Attorney General Lisa O. Monaco’s September 15, 2022 memorandum, which directed all DOJ components that prosecute corporate crime to draft or review their voluntary self-disclosure policies.
Under the newly announced VSD policy, a corporation is considered to have voluntarily self-disclosed if it (1) becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the DOJ, and (2) discloses that misconduct to the government prior to an imminent threat of disclosure or investigation. A company must also disclose all known relevant facts concerning the misconduct; move in a timely fashion to preserve, collect, and produce relevant documents; and provide timely factual updates to the USAO.
Companies that meet the requirements of the policy will receive significant benefits.
- Absent any aggravating factors, the USAO will not seek a guilty plea where a company has voluntarily self-disclosed in accordance with the policy, fully cooperated, and timely and appropriately remediated. The USAO may also choose not to impose a criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the U.S. Sentencing Guidelines fine range. The USAO will also not require the imposition of an independent compliance monitor for a cooperating company that has voluntarily self-disclosed and timely and appropriately remediated the criminal misconduct if the company demonstrates at the time of the resolution that it has implemented and tested an effective compliance program.
- If a guilty plea is warranted due to the existence of an aggravating factor, the USAO will still recommend at least a 50% and up to a 75% reduction off of the low end of the Guidelines fine range and will not require the imposition of a corporate monitor if the company has an effective compliance program. Aggravating factors can include circumstances where the misconduct poses a particularly grave threat to national security, public health, or the environment; is deeply pervasive throughout the company; or involves the current executive management of the company.
The VSD policy aims to incentivize companies to maintain effective compliance programs, timely self-report misconduct, and fully cooperate with government investigations. It also serves to standardize how federal prosecutors nationwide determine whether a company has voluntarily self-disclosed, fully cooperated, and remediated. As a result of this new VSD policy, companies can expect more predictable outcomes.