Recent actions by the United States Department of Justice (DOJ) clearly demonstrate its focus on ensuring the effectiveness of both a corporation’s compliance program and its compliance officer.
Just this week, DOJ’s Criminal Division issued updated guidelines regarding the evaluation of corporate compliance programs. The guidelines describe the various specific factors that white-collar prosecutors are to “consider in conducting an investigation of a corporation, determining whether to bring charges, and negotiating plea or other agreements.” The detailed guidelines make it clear that such factors will include a full assessment of the effectiveness and adequacy of the compliance program, both at the time of the offense and at the time of the charging decision. For example, DOJ will be looking to see if the program is both well-funded and well-integrated into the company’s workforce and operations. Additionally, the government will take an interest in whether the compliance program is properly designed to address the particular types of misconduct within that business. The prosecutors must also consider the remedial efforts taken in order to implement an effective compliance program or to improve an existing program. Such an analysis will assist the government in determining an appropriate resolution or prosecution, any monetary penalty and any new compliance obligations like monitoring, reporting and/or changes to the compliance program.
It may not be coincidental that the issuance of such guidelines occurs within a week of the Department’s indictment of the compliance officer in the Rochester Drug Cooperative investigation. Such an indictment further demonstrates DOJ’s willingness to hold the compliance officer responsible for ensuring the adequacy and efficacy of a compliance program in all sizes and types of businesses.
Explore a more detailed analysis of the DOJ’s guidelines in its guidance document on the evaluation of corporate compliance programs.
This advisory does not purport to be a substitute for advice of counsel on specific matters.
Harris Beach has offices throughout New York State, including Albany, Buffalo, Ithaca, Melville, New York City, Rochester, Saratoga Springs, Syracuse, Uniondale and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.