Trends in Corporate Financial Crimes Enforcement

Fresh from the International White Collar Crime Symposium (“Symposium”) held jointly by the International Bar Association and the New York City Bar Association, participants heard that the most pressing issue in the global white collar landscape is enforcement trends. What trends are being seen in the prosecution of corporate financial crimes of money laundering, financial fraud, FCPA violations, forfeiture, corruption, bribery, and related theft offenses in the workplace?

As our corporate workplaces rely less on the physical and more on the virtual and digital, lawyers are seeing greater scrutiny of corporate activity.

Corporate governance and transparency are not just for the huge corporations.

As digital data solutions rule company operations, corporations, both fledgling and booming, are capable of conducting business further and further away from their company base. Lawyers are seeing global reach for even the smallest of businesses. Local businesses can operate across the world, and with that, they can also explode unexpectedly. It is likely that lawyers handling white collar cases will see prosecuting agencies increasingly poking around all sizes and varied structures of companies.

Whistleblowers can come from across the world.

Another trend with increasing activity in financial crimes is whistleblowers. Surprisingly, individuals from abroad can and will contact the U.S. Department of Justice as well as U.S. Attorney Offices to report crimes. Again, this is an effect of global corporate presences. This past Tuesday, November 29, the Eastern District of New York U.S. Attorney, Breon Peace, told Symposium attendees that whistleblowers from foreign countries manage to report crimes to his Brooklyn office.

Best case scenarios for an alleged financial crime investigation: Deferred prosecution agreement (DPA) or Non-prosecution agreement (NPA).

Self-disclosure, cooperation, and remediation. Three factors to escape a law enforcement investigation or prosecution. Prosecutors want to see three factors to mitigate their view of a potential financial crime or misfeasance. This approach is new and key.

When a prosecuting agency scrutinizes an act, lawyers will see increased scrutiny of what happened when a company found the financial misfeasance. The more that companies “self-disclose,” the
more prosecuting agencies will see the companies as compliant. But even that is not enough. There is a time limit on these actions. Self-disclosure has to occur in close proximity to when the alleged misfeasance is discovered.

Cooperation and remediation are going to have to be meaningful and will have to shift the corporation
into compliance and better behavior in the marketplace. 2023 will see an increase in this trend as well.

Next week- how these three factors factor into ESG. What Is Environmental, Social, and Governance (ESG) Investing? [1] Environmental, social, and governance (ESG) investing refers to a set of standards for a company’s behavior used by socially-conscious investors to screen potential investments.

For questions related to white collar criminal defense matters, please contact Laurel F. Grass at lgrass@leechtishman.com or 212.603.6300. Laurel is Counsel with Leech Tishman and a member of the Litigation & Alternative Dispute Resolution, White Collar & Government Investigations, Corporate, and Data Privacy & Cybersecurity Groups.

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Leech Tishman Fuscaldo & Lampl is a national, full-service law firm dedicated to assisting individuals, businesses, and institutions. Leech Tishman offers legal services in business restructuring & insolvency, construction, corporate matters, employment & labor, estates & trusts, intellectual property, litigation & alternative dispute resolution, and real estate. In addition, the firm offers a wide range of legal services to clients in the aviation & aerospace, cannabis, emerging cyber technologies, energy & natural resources, entertainment, healthcare, hospitality, and life sciences industries. With offices in Midtown Manhattan, Leech Tishman also has offices in Chicago, Los Angeles, Philadelphia, Pittsburgh, Sarasota, Washington, D.C., and Wilmington, DE. 

[1] What Is Environmental, Social, and Governance (ESG) Investing? (investopedia.com)
Last accessed November 30, 2022