October 16, 2018
Due Diligence: DOJ Extends FCPA Approach to Other Misconduct
A few months ago, I blogged about the DOJ’s decision to apply its FCPA corporate enforcement policy – which provides significant incentives for voluntary disclosure & remediation efforts – to successors in M&A transactions. Now, the DOJ is extending that policy to other types of misconduct. Here’s the intro from this Wachtell Lipton memo:
In an important speech, Deputy Assistant Attorney General Matthew Miner of the Department of Justice’s Criminal Division announced on Thursday that DOJ will “look to” the principles of the FCPA Corporate Enforcement Policy in evaluating “other types of potential wrongdoing, not just FCPA violations” that are uncovered in connection with mergers and acquisitions. As a result, when an acquiring company identifies misconduct through pre-transaction due diligence or post-transaction integration, and then self-reports the relevant conduct, DOJ is now more likely to decline to prosecute if the company fully cooperates, remediates in a complete and timely fashion, and disgorges any ill-gotten gains.
The memo urges buyers to engage in “careful pre-acquisition due diligence and effective post-closing compliance integration” in order to best position themselves to take advantage of the DOJ’s enforcement approach in situations where misconduct at a target is uncovered.
– John Jenkins