The United States Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) have now issued guidance to corporations providing concrete benefits that companies, their shareholders, boards, and customers can earn by voluntarily self-reporting misconduct to the DOJ.
DOJ Corporate Enforcement and Voluntary Self-Disclosure Policy
In a speech at SIFMA’s Anti-Money Laundering and Financial Crimes Conference on May 12th, 2025, Matthew R. Galeotti, the head of DOJ’s Criminal Division, noted that “[m]ost corporations and financial institutions want to play by the rules and provide value for their shareholders and their customers” and that “[e]xcessive enforcement and unfocused corporate investigations” are counter-productive to innovation, efficiency, and productivity. As a result, the DOJ has opened the doors to pro-active corporate disclosure of wrongdoing through its revised Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”) (Justice Manual Section 9-47.120).
Under the new CEP, companies that meet the following four requirements will receive a declination of prosecution:
- Voluntarily self-disclose the misconduct to the DOJ Criminal Division;
- Fully cooperate with the Criminal Division’s investigation;
- Timely and appropriately remediate the misconduct; and
- Have no aggravating circumstances related to the nature and seriousness of the offense and no resolution or criminal adjudication within the last five years based on similar misconduct.
Even if aggravating circumstances exist, the company may still be eligible for a declination of prosecution based on weighing the severity of those aggravating circumstances along with the company’s cooperation and remediation efforts. Finally, even if self-disclosure is made after the DOJ has become aware of the misconduct, the company is still eligible to receive significant benefits, specifically a non-prosecution agreement with a term of fewer than three years, a 75 percent reduction of the criminal fine, and no independent compliance monitor.
SEC Self-Reporting Guidance
In a similar vein, staff from the SEC, speaking at both the New York City Bar Association White Collar Crime Conference and the SEC Speaks Conference, reiterated the importance of self-reporting and remediation before that agency. Citing the SEC’s Enforcement Manual, the SEC staff explained that self-reporting, cooperation, and remediation may not guarantee a declination but may lead to more favorable resolutions with the agency or possibly no enforcement action.
During the SEC Speaks conference, staff also noted that deficiencies uncovered during examinations of registrants were less likely to result in Enforcement referrals provided that the examined entity remediated the deficiency in a timely manner. SEC staff noted, however, that the Division of Enforcement will continue to consider factors set forth in the Enforcement Manual in determining whether conduct uncovered during an examination should lead to an investigation for a potential enforcement action.
CFTC Self-Reporting Guidance
On February 25, 2025, the CFTC issued an Enforcement Advisory setting forth guidance on self-reporting, cooperation, and remediation before that agency. The extensive memorandum described how the CFTC would provide “Mitigation Credit” in the form of a reduced penalty for self-reporting, cooperation, and remediation before that agency.
The Enforcement Advisory describes several tiers ranging from no self-reporting or cooperation to “exemplary” reporting and cooperation, and what steps are necessary to qualify for certain tiers. It sets forth a matrix of those tiered categories with the presumptive Mitigation Credits ranging from 0 percent (no self-report or cooperation) to 55 percent (exemplary self-report and cooperation). It also notes that, in extraordinary circumstances, such as where a person is the first to report wide-ranging misconduct and provides exemplary cooperation, the CFTC Enforcement Division may recommend a declination.
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