The DOJ’s New “Piling On” Policy

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2018-05-24

Posted by Brad Karp, Paul, Weiss, Rifkind, Wharton & Garrison LLP, on Thursday, May 24, 2018
Editor's Note: Brad S. Karp is partner and chairman at Paul, Weiss, Rifkind, Wharton & Garrison LLP. This post is based on a Paul, Weiss publication by Mr. Karp, Susanna Buergel, Roberto Finzi, Mark Mendelsohn, Alex Oh, and Lorin Reisner.

[May 9, 2018], Rod Rosenstein, Deputy Attorney General of the U.S. Department of Justice, announced a new policy, in the form of an addition to the United States Attorneys’ Manual (“USAM”), concerning the coordination of corporate resolution penalties in cases involving penalties imposed by more than one regulator or law enforcement authority. The new policy represents a promising development that has the potential to address a serious issue that has resulted in unfair outcomes due to the lack of coordination among enforcement authorities and the imposition of redundant fines and penalties.

In a speech announcing the new policy, DAG Rosenstein referred to the “piling on” of fines and penalties by multiple regulators and law enforcement agencies “in relation to investigations of the same misconduct.” [1] DAG Rosenstein noted that the “aim” of the new policy “is to enhance relationships with our law enforcement partners in the United States and abroad, while avoiding unfair duplicative penalties.” [2] Specifically, the new policy requires DOJ attorneys to “coordinate with one another to avoid the unnecessary imposition of duplicative fines, penalties and/or forfeiture against [a] company,” and further instructs DOJ personnel to “endeavor, as appropriate, to … consider the amount of fines, penalties and/or forfeiture paid to federal, state, local or foreign law enforcement authorities that are seeking to resolve a case with a company for the same misconduct.” [3]