2023 ABA White Collar Conference Takeaways

Resolution Economics attended the ABA’s White Collar Crime Conference that took place on March 1 – 3, 2023, where significant regulatory guidance was provided impacting how companies evaluate and prioritize decisions on compliance matters such as disclosure, compensation, and accountability. Our key highlights are provided below. For a downloadable version of the highlights, please click here.

Key Takeaways from Recent Regulatory Guidance

2023 ABA White Collar Crime Conference

Convergence of Combating White Collar Crime and National Security

• • Substantial investment will be made in DOJ’s National Security Division.

• • Regulators are increasing cross-agency coordination to evaluate and enforce non-compliance, including assessing and recalibrating penalties and fines to deter improper activities.

Continued Evaluation of Impacts of the Monaco Memo

• • Companies continue to assess how to obtain cooperation credit given unclear guidelines on what constitutes timely disclosure.

• • Executive compensation must be evaluated to determine if, and how, it needs to change.

• • Consideration will be given to recidivist activity and whether prior resolutions effected the intended change.

• • It is no longer just a question of whether to self-disclose, but when and to whom.

• • Corporations are less likely to obtain full credit if self-disclosure occurs months after a potential violation.

• • Absent aggravating factors, guilty pleas may not be required if companies timely self-disclose, cooperate, and evidence remedial efforts.

Management of New Guidance & Coordination of Differences among Federal, State, and OIG Standards

• • Given the slate of recently issued guidance, companies need to evaluate and implement any required changes to satisfy Federal, State, SEC, DOJ, and OIG regulations.

• • Companies need to determine what information to disclose to which agency, and how to obtain and coordinate resolution among domestic regulatory agencies.

• • Disclosure expectations should be evaluated for feasibility given the nature and progress of internal investigations.

Shift to Individual Accountability

• • Fines and penalties will shift to individuals responsible for bad acts to protect shareholders and reward companies that incorporate compliance objectives into financial incentives.

• • Resulting fines / penalties may be reduced by any clawback amounts successfully obtained or may be reduced by up to 25% of any clawback amounts not successfully obtained through good faith efforts. 

Combat of Cyber & Crypto Crimes

• • Agencies are doubling down on evolving strategies to detect and deter cyber and crypto crimes.

• • Companies may be caught off guard by crypto enforcement as it is unclear which regulator has jurisdiction.

• • Charges may include market manipulation, money laundering, or wire fraud rather than insider trading.

Maintenance & Accessibility of Employee and Third Party Electronic Data / Communications

• • Companies need to develop tailored policies.
  • Regulators will ask how data is preserved and accessed, specifically related to personal devices; answers will impact any resolution.
  • Prosecutors will not accept representations at face value.