Deputy Attorney General Announces New Coordination Policy for DOJ Attorneys in Obtaining Corporate Resolutions

May.09.2018

On May 9, 2018, while addressing white collar practitioners at the New York City Bar Association, Deputy Attorney General Rod Rosenstein announced a new DOJ policy to avoid the "piling on" of multiple penalties for the same conduct by encouraging coordination among DOJ divisions and with other enforcement agencies. For financial institutions, these other enforcement agencies are key. They include the SEC, CFTC, Federal Reserve, FDIC, OCC, and OFAC, which were specifically named by Rosenstein as part of DOJ's new coordination efforts.

There will be four key features of the new policy:

  • First, the policy will explicitly provide that the government's criminal enforcement authority should not be used against a company for purposes unrelated to the investigation and prosecution of a possible crime. In other words, the threat of criminal prosecution cannot be used for the sole purpose of obtaining a larger settlement in a civil case.
  • Second, the policy will direct DOJ divisions and U.S. Attorney's offices to coordinate with one another, and achieve an overall equitable result. This coordination may include crediting and apportionment of financial penalties, fines, and forfeitures, and other means of avoiding disproportionate punishment.
  • Third, the policy will encourage DOJ attorneys to coordinate "when possible" with other federal, state, local, and foreign enforcement authorities that are seeking to resolve a case with a company for the same misconduct.
  • Fourth, the policy will set forth factors that DOJ attorneys may evaluate in determining whether duplicative penalties are appropriate. These factors include the egregiousness of the misconduct, statutory mandates regarding penalties, the risk of delay in finalizing a resolution, and the adequacy and timeliness of a company's disclosure and cooperation with DOJ.

Although Rosenstein emphasized the importance of DOJ achieving equitable and global resolutions, he recognized that this may not be possible in many cases because of practical reasons, such as the timing of other agency actions and limits on cross-border information sharing, as well as diplomatic relations between the United States and other countries.

This new policy should give institutional clients some comfort that DOJ is explicitly focused on the issue of avoiding duplicative penalties, and to that end, prosecutors will be required to coordinate within the DOJ and with outside agencies. However, it remains to be seen how prosecutors will apply the "factors" articulated by Rosenstein in order to justify duplicative penalties in some cases, and whether this new policy will result in concrete benefits to institutions in negotiating corporate resolutions.