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DOJ prosecutorial changes could put more executives in jail

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The crest of the US Department of Justice (DOJ) is seen at their headquarters in Washington, D.C., U.S., May 10, 2021.

Andrew Kelly | Reuters

Significant changes are coming to the ways federal prosecutors will handle white collar criminal cases, putting a greater emphasis on individual executives who commit fraud, a senior official on the Department of Justice said Thursday.

DOJ is changing the motivation structure for firms negotiating with the federal government over cases of corporate wrongdoing, in accordance with the official. The federal government will give credit to firms that come forward with information and names of individual executives involved in criminal activity, the official said.

“Timeliness for details about key individuals can be a key metric for prosecutors who’re judging the credit firms get for his or her for his or her cooperation,” the official said. “If the corporate comes forward, people may go to jail, and that’s the intent here. But the corporate itself on behalf of its shareholders may avoid a guilty plea.”

The department plans to also make it way more difficult for firms to get successive non-prosecution agreements. Now prosecutors will weigh the total range of an organization’s prior conduct when making decisions about resolutions.

“Historically there was a priority that some firms might view resolutions with the Department of Justice as a value of doing business and think there was a possibility of multiple successive non-prosecution agreements or deferred prosecution agreements,” the official said. “We’re attempting to send a message that is not the case.”

And the DOJ can also be going to emphasise executive compensation clawbacks, so the executives who committed the fraud pay a price, not only the shareholders of the corporate when an organization foots the bill for a high quality. 

Recent rules are also expected on corporate compliance monitors who are sometimes tasked with ensuring firms stay on their best behavior after misconduct.  

Deputy Attorney General Lisa Monaco will unveil the brand new policies Thursday evening at Recent York University.

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