A HIT TO THE POCKETBOOK: NEW DOJ GUIDANCE FOR COMPENSATION-RELATED COMPLIANCE
In recent years, the US Department of Justice (DOJ) has become increasingly concerned about companies that have not fully integrated their compliance programmes into their business operations, exposing companies subject to repeated enforcement action. For example, Kenneth Polite, assistant attorney general of the criminal division at the DOJ, cited the recent resolution with Ericsson where the DOJ found that Ericsson had breached the deferred prosecution agreement it entered in 2019.
The DOJ faulted Ericsson because it had not produced relevant documents in a timely manner which prejudiced the DOJ’s ability to charge individuals. It also failed to disclose additional problematic conduct. Ericsson eventually agreed to plead guilty to the original charges and pay $200m in fines, and its compliance monitor was extended for another year. The DOJ’s message was clear: “A company’s good behaviour will be met with benefits; failure to live up to your obligations will be met with severe consequences.”
This warning has been sent for years by US government enforcement authorities which are constantly looking for different and more aggressive ways to ensure that companies are not just turning a blind eye to compliance risk and creating ‘paper’ programmes with no real heft. In the past few years, the DOJ has looked for concrete metrics from companies touting the efficacy of their compliance programmes when they are seeking a resolution from the DOJ. This has spawned government interest in the increased use of data analytics, investigatory protocols for whistleblowing reporting, and records or logs of disciplinary actions taken against erring employees throughout the organisation.
Jul-Sep 2023 Issue
Thompson Hine LLP