Sentencing Credit Given for Upgrading Antitrust Compliance Program After the Antitrust Investigation
The old adage "better late than never" has added weight after a recent development in enforcement and sentencing by the Department of Justice. Barclays PLC was one of four investment banks that entered into a plea agreement for its role in a conspiracy to manipulate prices in the foreign currency exchange. When the investigation of Barclays began, the bank aggressively undertook to upgrade its compliance program. Those efforts paid off.
In a first, the DOJ gave sentencing credit to Barclays based on its implementation of an effective compliance program after the investigation began. The May 20, 2015, plea stated: "The parties further agree that Recommended Sentence is sufficient, but not greater than necessary to comply with the purposes set forth in 18 U.S.C. §§ 3553(a), 3572(a), in considering, among other factors, the substantial improvements to the defendant’s compliance and remediation program to prevent recurrence of the charged offense."
The plea agreement is being seen as a strong signal that the DOJ intends to increase incentives to encourage effective compliance programs, even if those programs are only implemented after a violation. Though this is the first time sentencing credit has been given for a compliance program implemented after the violation, many believe that this will become a new policy at the Antitrust Division.
Specific details are not available concerning what made the Barclays compliance program sufficiently effective to warrant the credit given, but some clues can be found in the published remarks of Brent Snyder, Deputy Assistant Attorney General, Antitrust Division at the Department of Justice made to the International Chamber of Commerce in September 2014. There, Snyder discussed some of the factors that make a compliance program “effective” in the view of the Antitrust Division:
“It starts at the top,” meaning senior executives and the board of directors must fully support and engage with the company’s compliance program.
It needs to include the entire organization, with all executives, managers, and most employees subject to training. It may also need to include training for subsidiaries, distributors, agents, and contractors.
The program should be proactive, providing for regular monitoring and auditing of risk activities, and frequent review of the compliance program itself.
Violators should face the consequences under the program, and while the division policy does not require termination of culpable employees, they were clear that retaining culpable employees may raise questions about a commitment to effective antitrust compliance.
In the event of discovery of criminal antitrust conduct, the program must effect sufficient changes to prevent said conduct from happening again.
Of course, with a truly effective compliance program, companies will prevent the need for credit in pleading guilty to an antitrust violation. Nevertheless, if a company finds itself being investigated for antitrust violations, then it may not be too late to obtain a benefit from implementing an effective compliance program.