Wax On, Wane Not: Corporate Investigations and Enforcement Actions are on the Rise at DOJ
Every national election cycle, we are reminded that presidential administrations drive the trajectory of white-collar civil and criminal enforcement priorities.[1] Halfway through President Biden’s first term, in 2022, Attorney General Merrick Garland announced, “I have . . . seen the Justice Department’s interest in prosecuting corporate crime wax and wane over time. Today, it is waxing again.”
Two years later, has the Attorney General’s predictions manifested? The answer is a resounding “yes.”
As part of Garland’s Department of Justice (DOJ), over the past three years, the department has taken significant steps to hold individuals accountable for corporate violations and to increase the use of monitorships, reversing prior DOJ guidance disfavoring the practice.2
The DOJ said it would not seek guilty pleas where corporations voluntarily disclosed violations, fully cooperated, and quickly remediated the conduct. Cooperating companies could avoid monitorship if they implemented effective compliance programs. Despite these clear instructions from the DOJ, many still confuse cooperation with expected compliance. Gone are the days when a company could obtain cooperation credit for complying with run-of-the-mill subpoena requests or making witnesses appear voluntarily in lieu of appearing before the grand jury.
Recent Federal Enforcement Actions
Recent enforcement actions confirm DOJ’s promises: Judge Dillon, in the Western District of Virginia, ordered a company to pay the government more than $811 million in restitution and penalties for deceptive and abusive tactics regarding services it provided to immigrants in federal detention.
Just last month the enforcement arm for the Department of Education (DOE) issued its largest fine in history to a Virginia university: $14 million for Cleary Act Violations. Along with the fine, the university agreed to spend $2 million on compliance improvements and to undergo two years of monitoring.
Similarly, the Environmental Protection Agency (EPA) reports that in 2023, it significantly increased on-site inspections, criminal investigations, civil settlements, cleanup enforcement, and record levels of enforcement activity in environmental justice communities.
Fines levied by the Financial Industry Regulatory Authority (FINRA) spiked 63%, rising from $45.4 million in fines in 2022 to $89 million in 2023. These examples confirm this administration’s zeal for aggressive enforcement actions.
Recent State Enforcement Actions
State Attorneys General have ramped up enforcement and are frequently joining forces to take on corporations. Coalitions of State Attorneys General are currently pursuing antitrust actions against technology companies like Meta (formerly Facebook) and Google. State Attorneys General also are joining the federal Consumer Finance Protection Bureau (CFPB) to bring consumer financial protection actions.
Pharmaceutical companies are also in the crosshairs of both state and federal authorities. In 2021, four companies—including Johnson & Johnson—entered a multistate agreement to pay $26 billion to settle claims they fueled the opioid epidemic. The Washington State Attorney General pursued a separate action against Johnson & Johnson. Now, it is paying $150 million to the state of Washington.
The above examples show agencies will continue to aggressively pursue enforcement matters despite the political calendar. Let us help you avoid unnecessary business interruptions and distractions, whether you are in a highly regulated area or deal with industries that are within the reach of federal or state agencies. We have deep experience helping our clients navigate the maze of government enforcement actions, from receipt of a records subpoena, to grand jury testimony, and through any enforcement action. Getting in early is key to protecting your business and assets.
Meet the Government Investigations team here to protect you.
[1] Daniel J. Fetterman et al., Defending Corporations and Individuals in Government Investigations 1 (Daniel J. Fetterman & Mark P. Goodman eds., 2022).
[2] Id. at 5 (citing Lisa O. Monaco, Deputy Att’y Gen., U.S. Dep’t of Justice, Keynote Address at ABA’s 36th National Institute on White Collar Crime (Oct. 28, 2021), https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-gives-keynote-address-abas-36th-national-institute).
Team
Of Counsel
Of Counsel
