U.S. Deputy Attorney General Rod Rosenstein announced a new DOJ policy to encourage cooperation among the DOJ, federal and state enforcement agencies, and foreign counterparts. The policy is designed to avoid "piling on" excessive penalties for the same underlying corporate misconduct.

Speaking at the New York City Bar Annual White Collar Crime Institute, Mr. Rosenstein discussed the importance of pursuing enforcement actions against corporate and individual wrongdoers to bring bad actors to justice. The policy is an acknowledgment that aggressive enforcement by multiple agencies, with each pursuing its own penalties and other remedies, has the potential to impact a business disproportionately based on the severity of the alleged misconduct.

The new policy is intended to:

  • affirm that the federal government's criminal enforcement authority "should not be used against a company for purposes unrelated to the investigation and prosecution of a possible crime" (i.e., to persuade a company to pay a larger settlement in a civil case);
  • direct attorneys Department-wide, when pursuing a case against a company based on the same misconduct, to coordinate in order to achieve "an overall equitable result";
  • encourage DOJ attorneys to coordinate with other federal, state, local and foreign enforcement authorities when pursuing a case based on the same corporate misconduct; and
  • establish factors – such as a company's willingness to self-disclose misconduct and severity of wrongdoing – that DOJ attorneys may use to evaluate whether or not multiple penalties "serve the interests of justice in a particular case."

The new policy will be included in the U.S. Attorneys' Manual Section 1-12.100, and will help guide DOJ enforcement decisions going forward.

Commentary / Stephen Weiss



Cooperation among government agencies to strengthen the global enforcement environment is, of course, not an entirely new idea. The Department, and Mr. Rosenstein himself, have addressed the "piling-on" problem before, as part of an evolving strategy to encourage both inter-agency and international cooperation, as well as voluntary self-disclosure and corporate cooperation with DOJ investigations.

Successful implementation of this policy (i.e., government agencies avoiding unwarranted duplicative penalties for the same corporate misconduct) will require enforcement agencies at home and abroad to communicate and cooperate with each other. For the policy to achieve its intended effect, DOJ and its counterparts must consider potential collateral consequences that "piling on" has on employees, shareholders and other parties, and account for competing enforcement demands and priorities.

Mr. Rosenstein's comments are encouraging insofar as they reflect progress in the development of a more consistent, transparent – and just – enforcement environment. By formally acknowledging the potentially crippling and disproportionate impact that "pile-on" enforcement can have on companies and their stakeholders, the DOJ recognizes the need to address and improve principles of fundamental fairness. And by incorporating the policy into the U.S. Attorneys' Manual, Mr. Rosenstein has indicated that the Department is serious about translating it into practice.

This comment was co-authored by James Treanor.

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