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Antitrust Division to Consider Corporate Compliance During Charging Stage of Criminal Investigations

On July 11, 2019, Assistant Attorney General Makan Delrahim announced that the Antitrust Division of the U.S. Department of Justice has established new procedures to consider antitrust compliance efforts of criminal defendants. The new procedures permit prosecutors to consider a company’s corporate compliance programs and efforts when criminal investigations are being resolved. This change represents a potentially dramatic shift in the Division’s antitrust leniency policy.

For a quarter century, the Division has provided substantial leniency to companies that are “first in the door” to discuss or otherwise cooperate regarding prohibited cartel activities. During that time, the Division developed a practice of requiring other company participants to enter guilty pleas to resolve criminal violations. AAG Delrahim explained that the “first in” process was effective in “assisting the Division’s efforts to hold co-conspirators and culpable individuals accountable.” Assistant Attorney General Makan Delrahim Delivers Remarks at the New York University School of Law Program on Corporate Compliance and Enforcement, U.S. Dep’t of Justice (July 11, 2019), available here.

But noting this month’s policy changes, Delrahim explained that “the time has now come to improve the Antitrust Division’s approach and recognize the efforts of companies that invest significantly in robust compliance programs.” Id. He then explained that Division prosecutors will now be permitted to consider corporate antitrust compliance at the charging state of criminal investigations – a previously prohibited practice.   

In a 17-page guidance document, the Division sets out factors for prosecutors to consider, including “the adequacy and effectiveness of the corporation’s compliance program at the time of the offense, as well as at the time of the charging decision.” JM § 9-28.800. The guidance focuses on three basic inquiries:

1.

 

Does the company’s compliance program address and prohibit criminal antitrust violations?
 

2.

 

Did the antitrust compliance program detect and facilitate prompt reporting of the violation?
 

3.

 

To what extent was a company’s senior management involved in the violation?
 

Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations, U.S. Dep’t of Justice Antitrust Division (July 2019), available here.

Other factors to consider are adopted from The International Chamber of Commerce Antitrust Compliance Toolkit and include:

1.

 

the design and comprehensiveness of the program;
 

2.

 

the culture of compliance within the company;
 

3.

 

responsibility for, and resources dedicated to, antitrust compliance;
 

4.

 

antitrust risk assessment techniques;
 

5.

 

compliance training and communication to employees;
 

6.

 

monitoring and auditing techniques, including continued review, evaluation, and revision of the antitrust compliance program;
 

7.

 

reporting mechanisms;
 

8.

 

compliance incentives and discipline; and
 

9.

 

remediation methods.
 

To put these considerations into context, the guidance provides further inquiries under each factor. For example, to evaluate the second factor – Culture of Compliance – a criminal prosecutor will answer the following questions:

 

What is the company’s senior leadership doing to convey the importance of antitrust compliance to company employees? How have senior leaders, through their words and actions, encouraged (or discouraged) antitrust compliance? What concrete actions have they taken to demonstrate leadership in the company’s antitrust compliance or remediation efforts, if relevant?
 

 

Have senior managers tolerated antitrust violations in pursuit of new business, greater revenues, or maintaining customers? Were senior managers involved in the violation(s)?
 

 

Has there been personal accountability by senior leadership for failures in the company’s antitrust compliance?
 

 

What else is the company’s senior leadership doing to set the tone from the top or bring about culture change throughout the company?
 

The Division’s new consideration also has been updated in the Justice Manual by removing the directive “that credit should not be given at the charging stage for a compliance program.” And the Division has updated its own Manual.

These aren’t the only updates within DOJ this year. In April, the Criminal Division published its guidance document for evaluating corporate compliance programs. In the words of AAG Delrahim, the Division – and really the Department as a whole – has rewarded “good corporate citizenship” and has remained “dedicated to predictability and transparency.” Antitrust Division Announces New Policy to Incentivize Corporate Compliance, U.S. Dep’t of Justice (July 11, 2019), available here.

As with any new guidance, it will take time to determine what effect the new guidance will have on prosecutors’ assessments, including what level of discount defendants can receive at the charging stage of criminal investigations. But for now, the guidance provides a corporate entity and its attorneys with metrics for evaluating its antitrust compliance program and perhaps developing stronger internal controls.

©2019 Greenberg Traurig, LLP. All rights reserved.

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About this Author

Pamela J. Marple Commercial litigation Lawyer Greenberg Traurig Law Firm
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Pamela J. Marple’s practice over 25 years has focused on regulatory and commercial litigation, government investigations, and corporate compliance matters. Ms. Marple has litigated cases and managed responses to government investigations before a broad range of courts and agencies, as a trial attorney for the U.S. Department of Justice, a senior investigative counsel for Congress, and a commercial litigation partner in private practice. Ms. Marple also counsels companies on compliance matters and serves currently as the Compliance Monitor for a global medical device company.

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Nathan J. Muyskens Greenberg Traurig  DC Global White Collar Criminal Defense Practice Foreign Corrupt Practices Act
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Nathan J. Muyskens is Co-Chair of the Global White Collar Criminal Defense Practice and defends corporate and individual clients in criminal grand jury investigations and prosecutions, internal investigations, regulatory inquiries and enforcement matters, and related parallel civil proceedings. Nate defends companies in corruption investigations and other matters related to the Foreign Corrupt Practices Act, and has experience handling government antitrust investigations on behalf of companies in various industries, such as health care, air travel, defense, pharmaceuticals, energy, chemicals, home products, and technology. Nate is active in court and behind the scenes, working with prosecutors to abandon investigations before they have been made public or charges are filed.

Nate’s recent work includes co-leading a white collar defense trial victory in U.S. v. Flotron – the first ever acquittal in a commodities “spoofing” trial. Additionally, he represents numerous executives in the financial industry in a variety of government fraud investigations.  He has also represented a number of individuals and companies in the Special Counsel and Southern District of New York’s investigation into alleged improprieties relating to the 2016 presidential election. 

In addition, Nate has been trial counsel in numerous civil cases throughout the United States, including antitrust and trademark actions.

Concentrations

  • White collar criminal defense

  • Government investigations

  • Foreign Corrupt Practices Act

  • Antitrust investigations

  • Cybersecurity

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Kip B. Randall Commercial Litigation Lawyer Greenberg Traurig Law Firm
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Kip B. Randall is a member of the Litigation Practice in Greenberg Traurig’s Washington D.C. office. He focuses his practice on white collar criminal matters, regulatory investigations, and complex commercial litigation.

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