DOJ’s Update to Its Evaluation of Corporate Compliance Programs Provides Additional Detail, but Not Necessarily Additional Clarity

On Tuesday, April 30, 2019, the Department of Justice’s Criminal Division released an update (the “Update”) to the “Evaluation of Corporate Compliance Programs”1 first released by the Fraud Section in 2017. That document provided a compendium of key questions for use by both prosecutors—to assist in their consideration and evaluation of companies’ compliance practices—as well as companies and their inhouse compliance professionals as food for thought in confronting their own compliance challenges. According to DOJ, this week’s Update2 “seeks to better harmonize the [Fraud Section] guidance with other Department guidance and standards while providing additional context to the multifactor analysis of a company’s compliance program.”3 Although the Update provides significant additional detail in a number of areas, it does not provide concrete guidance on how prosecutors should rank the relevant factors or apply them in evaluating a given compliance program which might satisfy some criteria, but fall short on others. As a result, executives and practitioners may be left to guess at how prosecutors ultimately will come out when they evaluate the company’s or client’s compliance program. Nevertheless, what is clear is that DOJ is absolutely committed to ensuring that companies implement strong compliance programs that both deter and correct allegations of misconduct. Companies and clients that fail to do so should expect to face thorough and exacting investigations from prosecutors trained better than ever in compliance issues.

I. BACKGROUND ON DOJ’S GUIDANCE ON THE EVALUATION OF CORPORATE COMPLIANCE PROGRAMS -

Tuesday’s release is the latest installment of DOJ’s efforts in recent years to emphasize the importance of compliance and increase the attention that prosecutors and executives alike pay to it before, during, and after corporate criminal investigation and resolutions...