DOJ Announces A “New Safe Harbor Policy For Voluntary Disclosures Made In Connection With Mergers And Acquisitions”
For years, DOJ officials have been talking about policy issues surrounding merger & acquisition activity and potential criminal conduct.
Earlier this week, Deputy Attorney General Lisa Monaco announced a “new safe harbor policy for voluntary self-disclosures made in connection with mergers and acquisitions.”
However, as highlighted below, substantively the policy is not really new, nor is it a safe harbor as companies who follow the policy and “receive the presumption of a declination” will still have to pay a disgorgement amount (which in the FCPA context can be millions and sometimes higher than other forms of resolution such as a non-prosecution or deferred prosecution agreement).
Before highlighting Monaco’s recent speech, set forth below is a sampling of speeches from DOJ officials over the past five years on the topic of policy issues surrounding merger & acquisition activity and potential criminal conduct.
Principal Associate Deputy Attorney General Miller On Voluntary Disclosure, Compensation Clawback, And National Security
It is September which means enforcement agency officials hit the “conference circuit” to give scripted speeches.
Today it was Principal Associate Deputy Attorney General Marshall Miller speaking at a private event to discuss “the Justice Department’s corporate criminal enforcement priorities” specifically (in what is perhaps a laughable statement to many who closely follow DOJ enforcement activity) the DOJ’s “commitment to consistency, predictability, and transparency in our corporate enforcement work …”.
Miller began by talking about voluntary disclosure and stated:
Assistant AG Kenneth Polite On Deterrence And Compliance Certifications
It is mid-September.
Thus, consistent with historical practices, DOJ officials are out giving speeches about DOJ policy. Previous posts here and here have focused on the recent release of the so-called Monaco Memo and this post highlights a recent speech by Assistant Attorney General Kenneth Polite.
In addition to discussing the recent Monaco Memo, Polite touched upon the following topics: deterrence and compliance certifications.
Deterrence
Stericyle Resolves A Net $59 Million FCPA Enforcement Action
Stericycle (an Illinois based medical waste disposal company) has been under FCPA scrutiny since mid-2017 (See here).
As highlighted here, approximately two months ago the company disclosed that it had “reached agreements in principle with the DOJ and SEC.” Specifically, Stericycle disclosed:
Yesterday, the DOJ and SEC announced (here and here) a parallel FCPA enforcement action against Stericycle.
The DOJ enforcement action involved this criminal information charging Stericycle with two counts of conspiracy to violate (1) the FCPA’s anti-bribery provisions, and (2) the FCPA’s books and records provision. The criminal charges were resolved via this deferred prosecution agreement pursuant to which Stericycle agreed to pay a net $35 million criminal penalty.
The SEC enforcement action involved this administrative order finding that Stericycle violated the FCPA’s anti-bribery, books and records, and internal controls provisions pursuant to which the company agreed to pay a net approximate $24 million in disgorgement and prejudgment interest.
Bad Advertising – Ad Group WPP Resolves $19.2 Million FCPA Enforcement Action
Last Friday, the SEC announced that London-based WPP (the world’s largest advertising agency and a company with depositary shares traded on the New York Stock Exchange) agreed to resolve a $19.2 million Foreign Corrupt Practices Act enforcement action.
The enforcement action focused on WPP subsidiary conduct in India, China, Brazil and Peru.
In summary fashion, the SEC’s order finds: