92 | Weil, Gotshal & Manges LLP LITIGATION TRENDS 2024 | 93 T O C E M P A N T I I P C A P R O W C C O N T A C T I N T A P P P A T C C L S E C Over the past year, federal criminal enforcement has continued its downward trend with the total number of criminal cases dropping to the lowest level since 1997, when the U.S. population was 25% smaller. Notably, that decline includes a corresponding drop in corporate fraud prosecutions. The number of white collar defendants charged last year reached just over 5,000 countrywide – half of the total about a decade ago in 2011, when there were over 10,000 white collar defendants. The Department of Justice (“DOJ”) and other regulators like the Securities and Exchange Commission (“SEC”) continue to point the finger at the white collar industry’s use of ephemeral messaging applications and other so-called “offchannel communications” as the cause of a significant data gap. The DOJ issued expansive guidance about the dangers and consequences of failing to produce such communications when requested; the SEC has continued to levy heavy fines against regulated companies for the use of off-channel communications. In addition to pointing to challenges caused by the failure to retain offchannel communications, the DOJ has also embarked on its own path to drum up cases and identify the corporate fraud and wrongdoing it is evidently struggling to uncover. The DOJ is increasingly asking the public to bring it cases through voluntary self-disclosure and whistleblowing mechanisms. In defending against bipartisan criticism from Capitol Hill over the pace and toughness of white-collar enforcement, the DOJ’s Acting Assistant Attorney General Nicole Argentieri said in December 2023 that “a series of company settlements” just missed closing before the end of 2023, and are expected in early 2024. As we leave the first quarter in the rearview and head toward spring, we’re left wondering if those cases are coming – or if, perhaps, they already came and failed to make a noticeable splash. Developments in DOJ Corporate Enforcement In October 2023, the DOJ announced its adoption of a new Mergers & Acquisition Safe Harbor Policy (the “Policy”) in an effort to promote and elevate corporate compliance. Under the Policy, where an acquiring company: (1) timely and voluntarily discloses criminal misconduct of a business it acquires within six months of closing; (2) cooperates with any necessary investigation; and (3) timely remediates the problem and makes the required restitution and disgorgement, the acquiring company will receive the presumption of a declination of criminal prosecution. The Policy is meant to “put a premium” on timely pre- and post-acquisition due diligence and integration, and encourage companies with effective compliance programs that wish to acquire companies with ineffective compliance programs and/or a history of misconduct to do so with the benefit of a potential Safe Harbor. An acquirer availing itself of the Safe Harbor and White Collar Defense Sarah Coyne Co-Head New York sarah.coyne@weil.com Daniel Stein Co-Head New York daniel.stein@weil.com C
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