Last week, I teased the continuation of a series of posts about the Fifth Amendment. That’s still coming, but I had to return to another common theme first. My preview came at the end of a post about both the Fifth Amendment and parallel proceedings, which I’d also written about before. The Inception-ing of the blog continues with yet another brief comment on parallel proceedings, this time inspired by a news item that Justin flagged in last week’s roundup: Deputy Attorney General Rosenstein gave a speech before the New York City Bar Association’s annual white collar crime conference. The whole speech is worth watching or reading, but the highlight of the address was DAG Rosenstein’s announcement of “a new Department policy that encourages coordination among Department components and other enforcement agencies when imposing multiple penalties for the same conduct.”
DOJ’s new policy is meant to discourage “piling on” by enforcement agencies whose overlapping penalties for the same misconduct may end up punishing defendants far more than the misconduct justifies. DOJ hopes that this new policy will encourage companies to report suspected wrongdoing and to fully cooperate with law enforcement. Cutting back on exorbitant fines and other penalties that go far beyond the purposes of deterring future misconduct and punishing wrongful acts may help to do just that.
There are four main components of the new policy, which has already been added to the U.S. Attorneys’ Manual:
- The government shouldn’t threaten criminal enforcement just to coerce a larger civil settlement.
- DOJ components (e.g., Civil Fraud, Criminal Fraud, individual U.S. Attorney’s Offices) should coordinate with one another when investigating the same misconduct, including by apportioning penalties as appropriate to avoid disproportionate punishments.
- DOJ lawyers are also encouraged to coordinate penalties with other federal agencies (like the SEC or OFAC) and with state and local law enforcement authorities.
- DOJ should consider certain factors in deciding whether multiple overlapping penalties for the same misconduct is justified.
Obviously this is good news for potential targets of federal investigation. It’s a bit too early to say much more at this point. Like all such DOJ guidelines, it doesn’t create enforceable rights, but I imagine someone more empirically-minded than I am may be able to assess whether it has any impact on total criminal, civil, and administrative penalties collected by the federal government by checking in every year or so—with the usual caveats that it’s tough to pinpoint the effects of one particular policy in an environment in which enforcement priorities shift subtly over time for lots of reasons.
If you were wondering about the title, “genug” is Yiddish for “enough.” It’s probably the most useful word my father ever taught me. But in this case, I probably won’t listen. The ways in which regulators can use criminal, civil, and administrative tools to go after a single target for identical conduct are among the most important things about government investigations for companies and individuals to understand—so I suspect they’ll continue to come up.