Cops on the Beat: Efforts to Deter Corporate Crime Ramp Up

Welcome to the June 2023 edition of our newsletter!  In this issue, we’ll examine new federal efforts to crack down on corporate crime, and what you can do to defend your clients.

Crime and Punishment: New Justice Department Efforts to Push Accountability

In the 20-plus years since the Enron scandal, regulatory efforts to prevent corporate fraud and other financial crimes have been an evolving movement, including the creation of new federal agencies like the Consumer Financial Protection Bureau, as well as the broadening of civil and criminal penalties for various malfeasance.  Most recently, the U.S. Justice Department has announced the creation of a database, not yet publicly available, detailing cases of “corporate wrongdoing.”  This database is part of a larger review of its corporate enforcement policies, and a signal that various bad behaviors, from bribery to price fixing, will be in focus.

Your clients can protect themselves by maintaining strong internal controls and a culture of transparency, but when bad acts are found, it is best to get ahead of them before a case is brought by an agency or law enforcement.  Investigating internal rumors and reports of bribery allegations, for example, is likely to expose embarrassing defects in corporate culture, but may also yield great benefits in terms of preparing for an eventual inquiry.  Thorough understanding of a bad actor’s motives, via public record checks and interviews, and the reason an opportunity to act has presented itself, can both help your company weather an investigative storm before it begins to pour down.