Charles E. Duross, James M. Koukios, and Vanshika Vij
FCPA + Global Anti-Corruption, Government Contracts + Public Procurement, Investigations + White Collar Defense, Public Companies Counseling + Compliance, and Securities Litigation
On October 12, 2018, the Assistant Attorney General (“AAG”) for the U.S. Department of Justice’s Criminal Division, Brian A. Benczkowski, announced a new memorandum regarding the imposition and selection of monitors for business organizations involved in Criminal Division cases (the “Benczkowski Memo”). The Benczkowski Memo closely tracks the Criminal Division’s previous guidance from 2009 (the “2009 Memo”). For example, the Benczkowski Memo retains the 2009 Memo’s basic structure for selecting a monitor: the company to be monitored proposes a pool of three qualified monitor candidates; line attorneys and supervisors from the relevant Criminal Division Section interview the candidates and submit a monitor recommendation memo to the Standing Committee on the Selection of Monitors; the Standing Committee reviews the recommendation and votes on whether to accept it; and the recommendation is submitted to the Office of the Deputy Attorney General (“ODAG”) for final approval. Nevertheless, the Benczkowski Memo incorporates some longstanding practices developed by the Criminal Division’s Fraud Section since the 2009 Memo was issued and contains some notable changes and helpful clarifications that companies in settlement negotiations with the Criminal Division will want to consider. Our key takeaways are:
Overall, while the Benczkowski Memo does not include much that is new, we believe it does helpfully update the monitorship guidance from 2009 by incorporating many longstanding practices that have developed in the monitorship selection and oversight process. This will provide useful guidance to companies and practitioners who may not be as familiar with the process. When it comes to monitorships, which can be very costly and disruptive to companies, this additional transparency into the Criminal Division’s expectations and approach is a welcome development. In the past few years, there has been a significant uptick in the use of monitors by the Criminal Division, and although this may simply be the product of the particular type and seriousness of the cases resolved during this time period, it remains to be seen whether this new guidance, and the potentially greater involvement of the AAG, signals that there will be fewer monitorships on the horizon.
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