New DOJ Guidelines Could Spur More Deferred Prosecution Agreements

The US Department of Justice has unveiled new policies allowing companies it is investigating for antitrust violations to get deferred prosecution agreements (DPAs) for having robust compliance programs. RANE spoke with Jonny Frank of StoneTurn to learn how the new policy would impact businesses’ legal strategies.

Both DPAs and non-prosecution agreements (NPAs) presume that the government suspects a company of wrongdoing and that an investigation is underway, says Frank. Before the new guidelines, though, the DOJ was more likely to give DPAs to companies that self-reported any wrongdoings.

  • Previously, if multiple companies had breached antitrust compliance, the first to report would have a greater chance of receiving a DPA, while the others would be investigated and prosecuted normally. This threat of prosecution is what drove companies to self-report, says Frank.
  • A DPA is a criminal filing against a company, mandating that it take certain steps to address the breach of regulations. The criminal charge is removed after the remedial actions are taken, the main benefit of self-reporting, since those not given the DPA are criminally charged.

Source - Gibson Dunn

Under the new DOJ guidelines, companies that are not the first to report can still receive DPAs if they have a robust antitrust compliance framework in place. The new standard, says Frank, may actually lead to less self-reporting.

  • During the charging phase, the DOJ will now consider the strength of the company’s compliance efforts at the time of the crime and at the time of charging. They will consider whether the program is well designed, whether it was applied in “good faith,” and whether or not the program works.
  • The DOJ has removed the incentive to be the first to report under the new guidelines, says Frank. Now, as long as companies have robust antitrust compliance programs in place they are still eligible to negotiate a DPA.
  • Frank argues that the new policy could result in more DPAs and less self-reporting. Though companies will still receive benefits for self-reporting, as it is one of the metrics used to gauge the strength of compliance programs, the need to do so early has been greatly reduced.

With the new guidelines, developing an effective antitrust compliance framework is more useful and important than ever, says Frank. Companies should take the following steps to make their compliance frameworks more effective.

  • Review and update existing compliance frameworks. Doing so will ensure that the company is compliant with the most up-to-date rules and is getting the most benefit from them.
  • Top management should commit themselves and the company to a culture of compliance and undertake regular compliance training for relevant employees on how compliance affects their day-to-day work.
  • Conduct regular internal audits to ensure the company is compliant both with company frameworks and federal regulations.
  • Promptly and effectively respond to all internal revelations of wrongdoing. Companies should establish methods for employees to confidently and safely report wrongdoing to appropriate internal channels and should quickly act on any reported malfeasance.

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