Those trying to gauge what Trump 2.0 means for directors’ and officers’ liability will want to read the Wall Street Journal’s April 13, 2025, article entitled “Trump Administration Retreats from White-Collar Criminal Enforcement” (here). The article contains statements of large law firm partners expressing their anxiety that the administration’s approach to white-collar crime prosecution will mean “significant slowdown” in law firm revenue from criminal defense work. But what may be bad news for law firms could be good news for corporate executives, because the Trump administration’s approach may mean corporate executives could face a reduced risk of criminal prosecution, at least for certain kinds of criminal allegations.
According to the Journal article, the Trump administration is “retreating from some types of white-collar law enforcement, including cases involving foreign bribery, public corruption, money laundering, and crypto markets.” The administration, the article says, is “effectively redefining what business conduct constitutes a crime.”
As detailed in the article, the changes in approach to white-collar crime is coming about in several ways.
First, it is coming about because of explicit policy decisions of the President, the Attorney General, and their staffs. For example, on February 10, 2025, the White House issued an executive order “pausing” the enforcement of Foreign Corrupt Practices Act cases, saying that bribery prosecutions hurt the ability of American companies to compete overseas. Attorney General Pam Bondi has separately re-prioritized DOJ prosecutorial efforts, ordering the agency to focus white-collar crime attention on drug cartels and international crime organizations, particularly with respect to money-laundering, illegal immigration, and sanctions evasion.
With these shifting priorities, and consistent with the administration’s domestic and foreign policy objectives, DOJ prosecutors have been, according to the Journal, “open to arguments that a defendant has been targeted for political reasons, or that some prosecutions undermine economic competitiveness and national security interests.” And, the Journal adds, “political connections within Trump’s world seem to matter.”
The Journal article identifies several examples to illustrate these points, including the move by the Trump administration’s move to drop compliance monitors at Glencore, which pled guilty in 2022 to charges of overseas bribery and market manipulation; the decision by the Trump administration to drop charges against New York City Mayor Eric Adams; and the grants of clemency or pardons to several individuals, including Nikola founder Trevor Milton.
In addition to these changes attributable to the administration’s re-prioritization, some prosecutorial changes simply reflect agency personnel moves. The acting head of the DOJ’s criminal division was pushed out. The head of the criminal division’s fraud section had been told that he will be replaced. Key officials in the Manhattan U.S. attorney’s office (source of many financial crime prosecutions) have left or have been replaced. Key personnel have also left the SEC.
As the article details, the administration’s priorities shift has aided white-collar defense counsel to obtain relief for clients on existing matters. But there are problems ahead for these defense lawyers. As the Journal puts it, “while the shifting approach to enforcement stands to help white-collar defense lawyers on the current cases, some are getting worried that future work will dry up if the administration fully retreats from foreign-bribery investigations and complex Wall Street probes.”
The article goes on to quote a retired big law partner as saying that “The bar is very concerned that there is going to be a cutback in these kinds of investigations,” adding that “Firms that have a huge litigation practice and devote a lot of resources to internal investigations are going to be impacted.” Another attorney is quoted as saying “Every major white-collar group is concerned that there will be a significant slowdown.”
Discussion
The possibility of a business slowdown for white-collar criminal defense attorneys is bad news for them, but it is good news for corporate directors and officers and their insurers. The reduced likelihood of corporate investigations and criminal prosecutions represents a change in the potential scope of corporate and executive liability. The likely magnitude of the potential change is hard to measure, but there is no doubt that a reduction in the number of white-collar investigations and prosecutions is — in terms of potential corporate and executive liability — a welcome development.
If there are indeed fewer white-collar investigations and prosecutions, it could also mean fewer follow-on corporate and securities lawsuits, as well. Over the last several years, it has been a recurring phenomenon that companies facing criminal charges often are hit with tagalong civil lawsuits, filed against companies and their senior executives, alleging that the failure to prevent the underlying misconduct or the failure to make full disclosures about the underlying activity violated duties to investors and others. A reduction in the number of corporate investigations and prosecutions could also mean a reduction in the number of these kinds of follow-on lawsuits
The reduced potential liability exposure as a result of the administration’s approach to white-collar crime is one among several ways that the advent of Trump 2.0 may be translate into reduced potential liability exposures for companies and their executives.
One particular way that current Trump administration’s actions and policies could prove to be beneficial from a potential corporate liability perspective is with respect to Trump’s powers of judicial appointment.
There hasn’t been a lot of press so far about Trump’s judicial appointments in the current administration. That is likely because so many other topics (tariffs, immigration crackdown, federal agency workforce reductions, concerns rating to the war in Ukraine and the war in Gaza, etc. ) have flooded the zone. We undoubtedly will hear more in the months ahead about Trump’s judicial appointments, particularly if circumstances arise that give him the opportunity for one or more additional Supreme Court nominations. Over the long haul, Trump’s judicial appointments could have a significant and long-lasting impact.
It is worth noting that during his first administration, Trump appointed 234 federal judges, including three U.S. Supreme Court justices and 54 circuit court judges. As of the date of his second inauguration, then-sitting Trump appointees represented about 26.2% of all authorized federal judge slots, including one-third of the sitting U.S. Supreme Court justices. In the current administration, Trump will have the opportunity to further shape the federal judiciary, with the possibility that by the end of his upcoming term, about half of the sitting federal judges could be Trump appointees.
In his first administration, Trump tended to appoint judges who were young and conservative. If, as seems likely, he follows this same judicial appointment approach in his second term, his judicial appointments potentially could shape federal jurisprudence for the next generation.
There are many potential implications of a federal judiciary largely composed of Trump appointees, including for example with respect to, say, civil rights, environmental law, or consumer protection issues; from the perspective of potential D&O liability, a Trump-appointed judiciary potentially could be beneficial for companies and their executives, as Trump-appointed judges so far have tended to be business-friendly and conservative. Trump’s judicial appointments during his second term may represent another way that his administration may have a beneficial impact on the potential liability exposures of corporations, executives, and their insurers.