2023 Year-in-Review: Developments and Trends in White Collar Enforcement Litigation

The Securities and Exchange Commission (SEC) and Department of Justice (DOJ) both accelerated their enforcement efforts in 2023, and seem poised to further intensify these efforts in 2024.  At the same time, the SEC disseminated new disclosure requirements across sectors, including disclosures related to cybersecurity and artificial intelligence (AI), and renewed its focus on the corporate and social aspects of environmental, social and governance (ESG) guidance.  Its Enforcement Division remained focused on litigating high-stakes cases in the digital assets space and expanded its sweep related to off-channel communications. 

The DOJ has also charged several cases in the fraud and anti-money laundering space related to digital assets, including the recent trial conviction of Sam Bankman-Fried and the guilty pleas of Binance and its Chief Executive Officer, Changpeng Zhao.  In addition, the DOJ made a number of announcements related to guidance and policies concerning corporate criminal enforcement, much of which is focused on fostering a culture of compliance within companies while continuing to pursue actions against alleged individual wrongdoers.  The recent adoption of the Foreign Extortion Prevention Act (FEPA), companion legislation to the Foreign Corrupt Practices Act (FCPA), adds a new tool in the DOJ’s arsenal to prosecute the recipients of foreign bribes, closing a notable gap and providing a mechanism to charge the “demand side” of foreign bribery.  This new legislation is particularly timely as the DOJ continues to prioritize and remain active in its anti-corruption efforts involving both companies and individuals, including a number of significant FCPA matters in 2023.

SEC Enforcement Highlights

The SEC reported 784 total enforcement actions filed in 2023, a 3% uptick from the previous year, while total financial remedies dropped from $6.4 billion in 2022 to $4.9 billion in 2023.[1]  The SEC continues to pursue aggressive enforcement actions against a variety of digital asset market participants, including issuers, trading and lending platforms and related individuals.[2] Like many of the investors it regulates, the SEC intensified its focus on AI in 2023, announcing a crackdown on AI disclosures and proposing a new rule governing AI-related conflicts of interest, with Chair Gary Gensler calling for cross-regulatory action to take on AI-related financial stability risks.[3]  The SEC’s whistleblower program also continued to grow:  the SEC received over 18,000 whistleblower tips, topping last year’s then-record of 12,300 tips, and distributed a record of almost $600 million in whistleblower awards, including a $279 million all-time-high award to one individual.[4]  Finally, several settlements exemplified the SEC’s continued focus on traditional areas of SEC oversight, including the regulatory activity of investment advisers, broker-dealers and credit rating agencies, compliance with Rule 206(4)-1 (the Marketing Rule),[5] and disclosure-related violations.[6]

Digital Assets

Chair Gensler has made clear that he views the vast majority of digital asset industry participants as failing to comply with the securities laws.  This position translated into lawsuits in federal court against several of the largest U.S.-based digital asset trading platforms for allegedly failing to register as securities exchanges, broker-dealers and clearing agents, all of which are premised on the SEC’s allegations that dozens of digital assets sold and offered by these exchanges are securities.[7]  However, the SEC has experienced mixed results in litigation in this space in 2023, with a summary judgment win against the digital asset issuer LBRY, a mixed decision on summary judgment against Terraform Labs where the court held that certain digital assets issued by Terraform Labs violated the securities laws while others did not, and a high-profile loss on summary judgment against Ripple, where the court held that the digital asset at issue (XRP) was not itself a security and Ripple did not engage in an unregistered securities offering when selling XRP on digital asset exchanges.[8]  Following this decision, the SEC dismissed its sole claim against the current and former CEO of Ripple, representing a rare complete victory for individual defendants against the SEC in a high-profile litigated case.[9] 

Early 2024 will present a series of critical tests for the SEC’s digital asset agenda, with oral argument scheduled on defendants’ motions to dismiss in two of the digital asset trading platform cases (Coinbase and Binance) in mid-January, and trial set to begin against Terraform Labs and its founder Do Kwon in late-January.  

Internal Controls and Controls Disclosures

The SEC has continued to investigate and litigate cases regarding alleged internal controls weaknesses, increasing the number of actions based on alleged stand-alone controls violations without a separate violation of disclosure rules.[10]  The SEC’s key cases this year regarding public company financial reporting and disclosure failures included settlements with an advisory firm for its failure to adopt and implement adequate written policies to value assets in the funds managed by the firm,[11] with a leading financial news organization for alleged improper and misleading disclosures relating to its paid subscription service,[12] and with a transportation company and its former CEO for their failure to disclose perks provided to the former CEO and other executives.[13]

The SEC also finalized a rule that standardizes disclosure requirements related to cybersecurity incident reporting.[14]  At the same time, the SEC has demonstrated its commitment to pursuing actions against companies that are victims of cyber-attacks.  Most notably, the SEC charged a software company and its chief information security officer for fraud and internal control failures relating to allegedly known cybersecurity risks and vulnerabilities, alleging for the first time that a company’s cybersecurity controls are part of the internal controls system required by the securities laws.[15]

Off-Channel Communications

The SEC’s industry sweeps aimed at employees’ alleged use of off-channel communications have continued, but at a slower pace than last year.  In 2022, the SEC collected more than $1.2 billion in penalties from many of the largest financial institutions in the U.S.  This year, the SEC filed settled actions against 25 broker-dealers, investment advisors and credit-rating agencies for a total additional $400 million in penalties.[16]  As we enter the third year of this sweep, the SEC seems intent on further broadening the scope of its targets, as a variety of companies continue to agree to pay hefty fines even after voluntarily self-reporting their off-channel activity.[17]

ESG Enforcement

The SEC’s enforcement priorities continue to include a focus on climate and ESG-related disclosure.  In March 2023, the SEC agreed to a $55.9 million settlement of a litigated case against a mining company related to its safety disclosures in connection with a dam collapse, after voluntarily dismissing all intentional fraud claims against the company.[18]  The SEC has also focused on enforcement actions related to the governance element of ESG, including a $35 million settlement with a video game company for allegedly failing to maintain disclosure controls and procedures to collect and analyze employee complaints of workplace misconduct, and charging, but because of substantial cooperation, declining to penalize, a fast food company in connection with its alleged failure to disclose the link between the departure of its CEO and allegedly improper workplace relationships.[19]  

Key DOJ Developments

In 2023, the DOJ announced several policy updates and issued guidance in a number of areas related to corporate criminal enforcement and compliance.  A steady theme of the announcements is that the DOJ continues to focus on incentivizing voluntary self-disclosure through expanding the availability of declinations offered and increasing credit for cooperation and remediation, which results in discounts on penalties for corporations.[20]  Recent corporate resolutions demonstrate the DOJ’s approach with respect to these new policies and guidance.  The DOJ also remained focused on corporate enforcement across a variety of substantive areas, including FCPA, anti-money laundering, sanctions and digital assets, with conduct touching on various sectors and regions across the globe.  Additionally, the DOJ continues to note its ongoing focus with respect to charging individuals alongside corporations.[21]

Policy Updates and Guidance

The DOJ issued policy updates and guidance focusing on encouraging and making clearer the benefits of self-reporting and cooperation; disciplining individual wrongdoers through clawing back compensation; updating compliance guidance, including with respect to off-channel communications; and providing a safe harbor for companies that detect, report and act to remediate misconduct at target companies in the M&A context.[22]  These policies are:

• Revised Corporate Enforcement Policy:[23]  This year saw significant modifications to the DOJ Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP).  The previous policy had provided the presumption of a declination for a company that voluntarily self-disclosed, fully cooperated and appropriately remediated misconduct, but only where there were no “aggravating circumstances” present.[24]  The revised CEP creates a specific path for a company to qualify for a declination notwithstanding the presence of aggravating circumstances, provided that the following heightened requirements are met: (i) the company made the voluntary self-disclosure immediately upon becoming aware of the allegation of misconduct, (ii) at the time of the misconduct and disclosure, the company had an effective compliance program and system of internal controls; and (iii) the company provided extraordinary cooperation to the DOJ and undertook extraordinary remediation.[25]  In explaining “extraordinary,” the DOJ has made clear that it is looking for something that goes “above and beyond” and is not simply “run of the mill” cooperation.[26]  Under the revised policy, where the DOJ seeks a criminal resolution for a company that voluntarily self-discloses, it will provide cooperation credit between 50% to 75% off the bottom of the applicable U.S. Sentencing Guidelines range and will generally not require a corporate guilty plea, including for criminal recidivists.  This is a significant jump from the prior 50% maximum credit available to cooperating companies and is consistent with the DOJ’s broader message of providing “bigger carrots” to incentivize companies to self-report misconduct, while wielding a “bigger stick” for companies that do not.[27]  Going forward, it remains to be seen how the DOJ will interpret what constitutes “timely” self-reporting and how that will affect cooperation credit.  Additionally, under the revised CEP, companies that do not voluntarily self-disclose are nonetheless eligible for increased cooperation credit up to 50% off of the applicable U.S. Sentencing Guidelines range, instead of the previous maximum of 25% under the earlier policy.[28]  The DOJ has explained that in assessing cooperation credit, it will use the “full spectrum” of zero to 50% cooperation credit and that “every company starts with zero credit and must earn any benefit.”[29]
• Compensation Incentives and Clawback Pilot Program:[30]  In March 2023, Deputy Attorney General (DAG) Lisa Monaco announced that the DOJ wanted companies to ensure that employees are personally invested in promoting compliance by “having skin in the game” through compensation structures that create financial incentives and disciplinary measures, shifting the burden of corporate malfeasance onto those more directly responsible.[31]  As part of those efforts, the DOJ announced its intention to more closely consider compensation structures and consequence management when assessing the effectiveness of a company’s compliance program.[32]  Under the DOJ’s revised compliance guidance (known as the Evaluation of Corporate Compliance Programs), prosecutors will evaluate specific key metrics including (i) the transparency of a company’s design and implementation of its compliance-promoting compensation system; (ii) the breadth of disciplinary actions—including compensation clawbacks—available to management to enforce compliance, and their consistent enforcement across different geographies and levels of the organization; and (iii) the tracking of relevant compliance-related metrics such as the percentage of compensation subject to cancellation or recoupment from those engaged in wrongdoing.[33]  In addition, the DOJ Criminal Division announced the launch of a three-year Pilot Program Regarding Compensation Incentives and Clawbacks (the Pilot Program), which encourages companies to claw back compensation to punish employee misconduct and/or non-cooperation, and reward companies that implement compliance-related criteria in their compensation and bonus systems.[34]  The Pilot Program requires companies entering into a resolution with the DOJ Criminal Division to implement compliance related criteria in their compensation and bonus systems and to report on the implementation of those measures to the DOJ.  Under the Pilot Program, the DOJ will also reduce penalties for a company up to the amount of compensation it is able to claw back from employees during the resolution term, provided the company fully cooperates and timely and appropriately remediates.[35]  Recent corporate resolutions highlight the DOJ’s use of the new Pilot Program.[36]
• Off-Channel Communications and Use of Personal Devices: The DOJ announced its expectations for cooperation in investigations, including through updates to the Evaluation of Corporate Compliance Programs,[37] which now directs prosecutors to consider as part of their analysis the company’s policies and procedures governing the use of personal and corporate devices (including messaging apps), the retention of electronic messages affecting its ability to conduct investigations, and notice that companies give employees about electronic data policies.[38]  Consistent with the DOJ’s Evaluation of Corporate Compliance Programs, prosecutors will take into consideration how companies deter risky behavior and foster a culture of compliance through their implementation of policies related to off-channel communications.  Among other areas, the DOJ will review the types of electronic communication channels used by company employees to conduct business and the mechanisms the company has put in place to manage and preserve information contained with each communication channel.[39]  In considering such policies, companies should work to ensure that they are consistent with the applicable labor and data privacy laws in jurisdictions in which they operate.

• Mergers & Acquisitions Safe Harbor Policy:[40]  With the policy goals of encouraging greater investment in compliance and avoiding any deterrence of M&A activity more generally, the DOJ announced a new Department-wide safe harbor that may shield companies from criminal prosecution where misconduct is identified and the acquiring company timely discloses the misconduct to the DOJ.[41]  Under the new policy, a company may qualify for a presumption of a declination, or a safe harbor, by (i) voluntarily disclosing criminal conduct within six months from the date of closing (regardless of whether the misconduct was discovered pre- or post-closing); (ii) cooperating with the DOJ’s investigation; and (iii) fully remediating within one year from the date of closing.[42]  In announcing the new policy, DAG Monaco made clear that the DOJ’s “goal is simple:  good companies – those that invest in strong compliance programs – will not be penalized for lawfully acquiring companies when they do their due diligence and discover and self-disclose misconduct.”[43]  The DOJ has highlighted two recent Corporate Enforcement Policy declinations in the context of M&A activity as examples of its approach in this area.[44]

FCPA

In 2023, the DOJ entered into six criminal corporate resolutions and issued two declinations under the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy.  One of those resolutions included a corporate guilty plea following the breach of a deferred prosecution agreement, as well as the extension of an ongoing monitorship.[45]  This past year’s FCPA resolutions also demonstrated the DOJ’s efforts to put into practice the various policies released earlier in the year and previewed in past years.[46]  One corporate resolution highlighted both the premium that the DOJ places on voluntary self-disclosure, as well as the requirement that self-reporting must be timely.[47]  In that case, the company voluntarily self-disclosed the misconduct approximately 16 months after learning of the allegations, which the DOJ determined was not “reasonably prompt” under the Corporate Enforcement and Voluntary Self-Disclosure Policy.[48]  Nevertheless, the DOJ highlighted the company’s voluntary self-disclosure, substantial cooperation and significant remediation in resolving the matter through a non-prosecution agreement that awarded a 45% reduction from the low-end of the applicable penalty range, as well as the first ever penalty reduction based on the withholding of bonuses under the Pilot Program.[49]  The DOJ also continues to expand its level of international cooperation and coordination with new foreign authorities, including coordinated resolutions with South Africa and, most recently, Colombia.[50]  DOJ leadership has consistently touted the value and importance of its international partnerships in investigating and prosecuting FCPA and other white collar cases and how it views foreign authorities as “force multipliers” in the fight against corruption.[51]  In November 2023, Acting Assistant Attorney General Nicole Argentieri announced the International Corporate Anti-Bribery (ICAB) initiative, which will build upon existing partnerships and develop new partnerships with foreign authorities, and will focus on particular regions that the DOJ views as having the greatest opportunity for coordination and case generation.[52]

The DOJ also continues to prioritize the prosecution of individuals in foreign bribery cases, as well as the use of multiple statutes to charge individuals, including the FCPA, money laundering, wire fraud and Travel Act.  The last few years have shown an uptick in the number of foreign bribery-related trials,[53] with several additional foreign bribery trials scheduled for the coming year, including the January 2024 trial of Javier Aguilar, a former Houston-based manager and oil trader of a European energy trading company, in the Eastern District of New York.[54]  Since 2018, the DOJ has announced charges against more than 150 individuals, and more than 100 individual convictions and guilty pleas, in foreign bribery-related cases.[55]

Finally at the end of 2023, Congress passed FEPA (the Foreign Extortion Prevention Act) as part of the 2024 National Defense Authorization Act.  This legislation, signed into law by President Biden in late December 2023, will complement the FCPA by addressing the “demand side” of foreign bribery not covered by the FCPA.[56]  Specifically, the new legislation is designed to prosecute foreign officials that solicit or receive bribes in exchange for being influenced or induced to perform or omit an official act or official duty, or conferring an improper advantage, in connection with obtaining or retaining business.  How FEPA will be enforced will be a development that bears monitoring in the coming months.

Digital Assets 

DOJ prosecutions of three of the biggest names in the digital asset space dominated the headlines in 2023.  Following the collapse of the digital asset platform FTX in November 2022, FTX’s founder Sam Bankman-Fried was brought to trial and found guilty in November 2023 of fraud and money laundering, among other charges, stemming from a wide-ranging scheme to misappropriate billions of dollars of customer funds. [57]  In March 2023, Do Kwon, the founder of Terraform Labs, was charged with eight criminal counts of fraud related to, among other events, the collapse of the digital assets Terra and Luna in May 2022.  Kwon spent most of 2023 in custody in Montenegro while pending extradition.[58]  Most recently, Changpeng Zhao, the founder and CEO of Binance, the world’s largest digital asset platform, pleaded guilty to failing to maintain an effective anti-money laundering program and resigned as the company’s CEO, while the company agreed to pay over $4 billion to resolve the investigation into alleged violations.[59]  

The DOJ earned plaudits for its successful expedited prosecution of Bankman-Fried, and has established itself as a key government actor in the digital asset enforcement space, both through its National Cryptocurrency Enforcement Team, the Money Laundering and Asset Recovery Section and several U.S. Attorneys’ Offices that now have experience with these cases.  The DOJ’s success in the digital asset space this year may serve as a model for its approach to other novel areas of technology in years to come. 

Key Takeaways

Boards of directors should be prepared for investigations and enforcement actions designed to implement newly announced policy goals.

• Investigations and enforcement actions will continue at a sustained pace as both the SEC and DOJ bring new actions and resolve existing matters based on the various new rules and policies that they have issued during this past year. 
• Expect continued and increased SEC litigation in the digital asset space against issuers, platforms and individuals.  This trend is likely to continue until there is comprehensive legislation or legal clarity from the federal courts of appeals and Supreme Court, neither of which is likely to happen until 2025 at the earliest.
• The SEC will likely continue to focus on the investigation and litigation priorities it has laid out in recent years, including internal controls and disclosure violations—with a greater focus on AI, ESG and cybersecurity.  Companies would be well-advised in the cybersecurity arena in particular to redouble efforts to make sure their cyber and disclosure controls are reasonably tailored to their businesses, and ensure that key actors are familiar with the SEC’s new rules in the space. 
• The DOJ will be focused on continued aggressive enforcement and resolution announcements that reflect the new policies announced this year.  Companies should prepare by conducting ongoing reviews and monitoring of their compliance programs, as appropriate, including by considering the feasibility and practical implementation of clawback policies for executives, updating policies in connection with off-channel communications and the use of messaging applications or personal devices, and ensuring that their compliance programs appropriately prioritize the detection and reporting of potential wrongdoing to allow for timely escalation and remediation. 
• Acquiring companies should continue to emphasize pre-close and post-close diligence focused on detecting and remediating misconduct of acquired companies to best position themselves to take advantage of new safe harbor provisions announced by the DOJ, as appropriate. 

[1] Press Release, “SEC Announces Enforcement Results for FY23” (November 14, 2023), available here.

[2] See also our November 2023 alert memo on this topic, “SEC Announces FY 2023 Enforcement Results with Second-Highest Penalties on Record”, available here; Press Release, “SEC Charges NBA Hall of Famer Paul Pierce for Unlawfully Touting and Making Misleading Statements about Crypto Security” (February 17, 2023), available here; Press Release, “SEC Charges Kim Kardashian for Unlawfully Touting Crypto Security” (October 3, 2023), available here; Press Release, “SEC Charges Terraform and CEO Do Kwon with Defrauding Investors in Crypto Schemes” (February 16, 2023), available here; Press Release, “SEC Files 13 Charges Against Binance Entities and Founder Changpeng Zhao” (June 5, 2023), available here; Press Release, “SEC Charges Coinbase for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency” (June 6, 2023), available here; Press Release, “SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX” (December 13, 2022), available here; Press Release, “SEC Charges LA-Based Media and Entertainment Co. Impact Theory for Unregistered Offering of NFTs” (August 28, 2023), available here.

[3] Press Release, “SEC Proposes New Requirements to Address Risks to Investors from Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers” (July 26, 2023), available here; Richard Vanderford, “SEC Head Warns Against ‘AI Washing,’ the High-Tech Version of ‘Greenwashing’” The Wall Street Journal, (December 5, 2023), available here; Speech, “Remarks before the Financial Stability Oversight Council:  2023 Annual Report” (December 14, 2023), available here.

[4] Press Release, “SEC Issues Largest-Ever Whistleblower Award” (May 5, 2023), available here.

[5] See also our June 2023 alert memo on this topic, “SEC Expands the Scope of Its Marketing Rule Examination Sweep – But Still No Guidance”, available here.

[6] See, e.g., Press Release, “SEC Announces Enforcement Results for FY23” (November 14, 2023), available here.

[7] In the complaints against two such platforms, Binance and Coinbase, the SEC alleged that 19 digital assets traded on these platforms were unregistered securities.  See Complaint, SEC v. Binance Holdings Limited, No. 1:23-cv-01599 (D.D.C. June 5, 2023), available here; Complaint, SEC v. Coinbase, Inc., No. 1:23-cv-04738, (S.D.N.Y. June 6, 2023), available here.

[8] Litigation Releases, “LBRY, Inc.” (July 12, 2023), available here; see also Summary Judgment Order, SEC v. Terraform Labs, 1:23-cv-1346 (S.D.N.Y. December 28, 2023), available here; Summary Judgment Order, SEC v. Ripple Labs, Inc., 1:20-cv-10832 (S.D.N.Y. July 13, 2023), available here.

[9] See also our News Listing on this topic, “Ripple CEO Brad Garlinghouse in Dismissal of All SEC Claims” (October 19, 2023), available here.

[10] Press Release, “SEC Announces Enforcement Results for Fiscal Year 2023” (November 14, 2023), available here.

[11] Press Release, “SEC Charges Investment Adviser for Compliance Failures” (May 24, 2023), available here.

[12] Press Release, “SEC Charges Former MusclePharm Executives with Accounting and Disclosure Fraud” (June 27, 2023), available here; Press Release, “Bloomberg to Pay $5 Million for Misleading Disclosures About Its Valuation Methodologies for Fixed Income Securities” (January 23, 2023), available here.

[13] Press Release, “SEC Charges Global Transportation Company Greenbrier and Former CEO for Failing to Disclose Perks and Payments” (March 2, 2023), available here.

[14] Final Rule, “Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure” (July 26, 2023) available here; Statement, “Cybersecurity Disclosure” (December 14, 2023), available here; See also Crossing a New Threshold for Material Cybersecurity Incident Reporting and our August 2023 alert memo on the SEC’s cybersecurity disclosure rules available here.

[15] Press Release, “SEC Charges SolarWinds and Chief Information Security Officer with Fraud, Internal Control Failures” (October 30, 2023), available here; Complaint, SEC v. SolarWinds Corp., 1:23-cv-09518 (S.D.N.Y. October 30, 2023), available here.

[16] Press Release, “SEC Charges 10 Firms with Widespread Recordkeeping Failures” (September 29, 2023), available here.

[17] Press Release, “SEC Charges 11 Wall Street Firms with Widespread Recordkeeping Failures” (August 8, 2023) available here (announcing penalties of $289 million against 11 firms for failing to maintain and preserve electronic records); Press Release, “SEC Charges 10 Firms with Widespread Recordkeeping Failures” (September 29, 2023), available here; Press Release, “SEC Charges HSBC and Scotia Capital with Widespread Recordkeeping Failures” (May 11, 2023), available here (announcing penalties of $15 million and $7.5 million against two firms for failing to maintain and preserve electronic communications).

[18] Press Release, “Brazilian Mining Company to Pay $55.9 Million to Settle Charges Related to Misleading Disclosures Prior to Deadly Dam Collapse” (March 28, 2023), available here.

[19] Press Release, “SEC Announces Enforcement Results for FY23” (November 14, 2023), available here; Press Release, “Activision Blizzard to Pay $35 Million for Failing to Maintain Disclosure Controls Related to Complaints of Workplace Misconduct and Violating Whistleblower Protection Rule” (February 3, 2023), available here; Press Release, “SEC Charges McDonald’s Former CEO for Misrepresentations About His Termination” (Jan. 9, 2023), available here.

[20] Speech, “Acting Assistant Attorney General Nicole M. Argentieri Delivers Remarks at the American Bar Association 10th Annual London White Collar Crime Institute” (October 10, 2023), available here; Speech, “Assistant Attorney General Kenneth A. Polite, Jr. Delivers Remarks on Revisions to the Criminal Division’s Corporate Enforcement Policy” (January 17, 2023), available here; Press Release, “Albemarle To Pay Over $218M To Resolve Foreign Corrupt Practices Act Investigation” (September 29, 2023), available here; Press Release, “Corficolombiana to Pay $80M to Resolve Foreign Bribery Investigations” (August 10, 2023), available here.

[21] Press Release, “Statement Of U.S. Attorney Damian Williams On The Conviction Of Samuel Bankman-Fried” (November 20, 2023) available here; Press Release, “Commodities Trading Company Agrees to Pay Over $98M to Resolve Foreign Bribery Case” (December 14, 2023), available here; Speech, “Acting Assistant Attorney General Nicole M. Argentieri Delivers Keynote Address at the 40th International Conference on the Foreign Corrupt Practices Act” (November 29, 2023), available here (discussing Corporate Enforcement Policy declination of Corsa Coal and charges against two former executives).

[22] The DOJ also updated its guidance on the selection of corporate compliance monitors.  See DOJ, “Revised Memorandum on Selection of Monitors in Criminal Division Matters” (March 1, 2023), available here; Speech, “Assistant Attorney General Kenneth A. Polite, Jr. Delivers Keynote at the ABA’s 38th Annual National Institute on White Collar Crime” (March 3, 2023), available here.

[23] DOJ, “Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy” (updated January 2023) available here; See, e.g., In re: Corsa Coal Corporation (CEP Declination Letter) (March 18, 2023), available here.  In that matter, the DOJ issued a declination pursuant to the Criminal Division’s  Corporate Enforcement and Voluntary Self-Disclosure Policy and declined to prosecute Corsa Coal, a coal producer, for violations of the FCPA where certain company employees and agents  were allegedly involved in a scheme to bribe foreign government officials in Egypt.  The DOJ noted that it declined to prosecute based, in part, on the company’s full and proactive cooperation with the DOJ’s investigation and its timely and appropriate remediation.  The company also agreed to disgorge its profits earned from the scheme, which was reduced to $1.2 million based on the company’s inability to pay the full disgorgement amount.

[24] CEP declinations are also still subject to the disgorgement of ill-gotten gains. See also our January 2023 alert memo on this topic, “U.S. Department of Justice Announces Revisions to Corporate Criminal Enforcement Policy” , available here. 

[25] The DOJ has explained that in determining what qualifies as “extraordinary” cooperation, it will look at indicia such as the immediacy and consistency of a company’s cooperation, the degree to which a company cooperates with the DOJ, and the impact of that cooperation on the DOJ’s own investigation. See Speech, “Assistant Attorney General Kenneth A. Polite, Jr. Delivers Remarks on Revisions to the Criminal Division’s Corporate Enforcement Policy” (January 17, 2023), available here.

[26] Id.

[27] See also our January 2023 alert memo on this topic, “U.S. Department of Justice Announces Revisions to Corporate Criminal Enforcement Policy”, available here.

[28] Id.

[29] Speech, “Acting Assistant Attorney General Nicole M. Argentieri Delivers Keynote Address at the 40th International Conference on the Foreign Corrupt Practices Act” (November 29, 2023), available here; Speech, “Assistant Attorney General Kenneth A. Polite, Jr. Delivers Remarks on Revisions to the Criminal Division’s Corporate Enforcement Policy” (January 17, 2023), available here.

[30] DOJ, “The Criminal Division’s Pilot Program Regarding Compensation Incentives and Clawbacks” (March 3, 2023) available here.

[31] Speech, “Deputy Attorney General Lisa Monaco Delivers Remarks at American Bar Association National Institute on White Collar Crime” (March 2, 2023), available here.

[32] See also our March 2023 alert memo on this topic, “Department of Justice Announces Revisions to Criminal Division Policies”, available here

[33] DOJ, “Evaluation of Corporate Compliance Programs” (updated March 2023), at 12-14, available here; see also our March 2023 alert memo on this topic, “Department of Justice Announces Revisions to Criminal Division Policies”, available here.

[34] Id.; see also DOJ, “The Criminal Division’s Pilot Program Regarding Compensation Incentives and Clawbacks” (March 3, 2023) available here.

[35] Id.

[36] Press Release, “Corficolombiana to Pay $80M to Resolve Foreign Bribery Investigations” (August 10, 2023), available here; Press Release, “Albemarle To Pay Over $218M To Resolve Foreign Corrupt Practices Act Investigation” (September 29, 2023), available here;  see also Speech, “Acting Assistant Attorney General Nicole M. Argentieri Delivers Remarks at the American Bar Association 10th Annual London White Collar Crime Institute” (October 10, 2023), available here.

[37] DOJ, “Evaluation of Corporate Compliance Programs” (updated March 2023), available here.

[38] See also our March 2023 alert memo on this topic, “Department of Justice Announces Revisions to Criminal Division Policies”, available here; see also Speech, “Assistant Attorney General Kenneth A. Polite, Jr. Delivers Remarks on Revisions to the Criminal Division’s Corporate Enforcement Policy” (January 17, 2023), available here. In his speech, AAG Polite noted that the DOJ would not accept a refusal to produce communications from third-party messaging applications “at face value.” He further cautioned that a company’s answers to questions about accessibility of communications, or the lack of answers, may well affect the criminal resolution a company will have to enter into with the DOJ.

[39] DOJ, “Evaluation of Corporate Compliance Programs” (updated March 2023), at 17-18, available here.

[40] Speech, “Deputy Attorney General Lisa O. Monaco Announces New Safe Harbor Policy for Voluntary Self-Disclosures Made in Connection with Mergers and Acquisitions” (October 4, 2023), available here.

[41] Id.

[42] See id. The DOJ explained that these deadlines can be extended subject to a “reasonableness analysis,” recognizing that the complexity of deals can differ and specific facts and circumstances may warrant extension; See also our October 2023 on this topic, “DOJ Announces Additional Guidance on Voluntary Self-Disclosure in M&A Context”, available here.

[43] Id.

[44] See, e.g., In re: Safran S.A. (CEP Declination Letter) (December 21, 2022), available here; In re: Lifecore Biomedical, Inc. (f/k/a Landec Corporation) (CEP Declination Letter) (November 16, 2023), available here.

[45] Press Release, “Ericsson to Plead Guilty and Pay Over $206M Following Breach of 2019 FCPA Deferred Prosecution Agreement” (March 2, 2023), available here.

[46] See Speech, “Acting Assistant Attorney General Nicole M. Argentieri Delivers Remarks at the American Bar Association 10th Annual London White Collar Crime Institute” (October 10, 2023), available here.

[47] DOJ Non-Prosecution Agreement, “Albemarle Corporation” (September 28, 2023), available here.

[48] Id.; see also Speech, “Acting Assistant Attorney General Nicole M. Argentieri Delivers Remarks at the American Bar Association 10th Annual London White Collar Crime Institute” (October 10, 2023), available here.

[49] Id.

[50] Press Release, “Corficolombiana to Pay $80M to Resolve Foreign Bribery Investigations” (August 10, 2023), available here; Press Release, “ABB Agrees to Pay Over $315 Million to Resolve Coordinated Global Foreign Bribery Case” (December 2, 2022), available here.

[51] Speech, “Acting Assistant Attorney General Nicole M. Argentieri Delivers Keynote Address at the 40th International Conference on the Foreign Corrupt Practices Act” (November 29, 2023), available here.

[52] Id.

[53] Press Release, “Former Goldman Sachs Investment Banker Convicted in Massive Bribery and Money Laundering Scheme” (April 8, 2022), available here; Press Release, “Former Venezuelan National Treasurer and Husband Convicted in International Bribery Scheme” (December 15, 2022), available here; Press Release, “Former Member of Barbados Parliament and Minister of Industry Found Guilty of Receiving and Laundering Bribes from Barbadian Insurance Company” (January 16, 2020), available here; Press Release, “Former President of Transportation Company Found Guilty of Violating the Foreign Corrupt Practices Act and Other Crimes” (November 22, 2019), available here; Press Release, “Former Senior Alstom Executive Convicted at Trial of Violating the Foreign Corrupt Practices Act, Money Laundering and Conspiracy” (November 8, 2019), available here.

[54] Press Release, “ Former Manager of Oil Trading Firm Charged in Money Laundering and Bribery Scheme” (September 22, 2020), available here.

[55] DOJ FCPA Unit, “Enforcement Actions,” available here; DOJ Fraud Section Year in Review 2018-2022, available here.

[56] See also our December 2023 alert memo on this topic, “Congress Passes Foreign Extortion Prevention Act to Prosecute Corrupt Foreign Officials”, available here.

[57] Press Release, “Statement Of U.S. Attorney Damian Williams On The Conviction Of Samuel Bankman-Fried” (November 2, 2023), available here.

[58] Alexander Osipovich et al., “Do Kwon Arrested in Montenegro as U.S. Charges Crypto Fugitive With Fraud” The Wall Street Journal (March 23, 2023), available here; Ava Benny-Morrison et al, “Do Kwon Charged With Fraud by US Prosecutors in New York” Bloomberg, (March 23, 2023), available here; Alexander Osipovich and Marko Vešović, “Exclusive: Montenegro Plans to Extradite Fallen Crypto Tycoon Do Kwon to U.S.” The Wall Street Journal, (December 7, 2023) available here.

[59] Press Release, “Binance and CEO Plead Guilty to Federal Charges in $4B Resolution” (November 21, 2023) available here.