SDNY Announces Corporate Enforcement And Voluntary Self-Disclosure And Cooperation Program For Financial Crimes

U.S. Attorney for the Southern District of New York, Jay Clayton, announced today the Office's new Corporate Enforcement and Voluntary Self-Disclosure Program for illegal activity involving fraud and financial misconduct affecting market integrity. The program, building on years of experience with corporate self-reporting, a focus on individual accountability, and a commitment to the interests of victims, is designed to protect investors, root out wrongdoing more quickly, and strengthen the integrity of the financial markets by encouraging companies to promptly disclose misconduct and take swift remedial measures.

The program establishes clear guidelines and predictable treatment for companies that voluntarily disclose certain classes of criminal activity to this Office. Under this program, eligible companies that self-report qualifying illegal activity, fully cooperate with law enforcement, commit to ongoing reporting of criminal conduct for three years, and remediate harm caused by the misconduct will have a clear, agreed path to a declination. Specifically, the Office will extend a conditional declination letter to qualifying companies shortly after they make a qualifying self-report. After a company satisfies its cooperation and remediation obligations and restitutes victim losses, the Office will provide a final declination letter, concluding the matter without criminal charges.

"The self-reporting program rests on a simple principle: prompt corporate disclosure and cooperation in rooting out and remedying wrongdoing is in the best interest of victims, shareholders, employees, and our markets generally," said U.S. Attorney Jay Clayton. "When companies do the right thing-report quickly, cooperate fully, and remediate harm-they should know where they stand. With this program, we expect there will be strong alignment among corporate fiduciary duties, corporate cooperation with the Department of Justice, and the interests of victims, shareholders, and the public generally. To be sure, companies that choose not to cooperate proactively and are found to have engaged in criminal conduct, will face significant corporate consequences."

The program builds on the Office's longstanding practice of favorably weighing voluntary disclosures and sincere cooperation in its charging decisions. Consistent with this new program, the Office already has extended a conditional declination letter to a self-reporting company within a month of that company making a disclosure. These types of self-reports also enable the Office to focus on holding individuals accountable. During U.S. Attorney Clayton's tenure, the Office has brought criminal charges against individual executives and employees based on information originally obtained through corporate self-disclosures and will continue to do so. These actions demonstrate that early disclosure and cooperation under this program will help this Office hold accountable individual wrongdoers, while also offering swift resolution and certainty to self-reporting entities that commit to remediation and cooperation.

Additional details about the SDNY Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes, including information about eligibility criteria and a model conditional declination letter, are available on the U.S. Attorney's Office website. Please visit https://www.justice.gov/usao-sdny/self-reporting-program.