DOJ is changing the way it prosecutes companies, and it could put more executives in jail

Significant changes are coming to the ways federal prosecutors will handle white collar criminal cases, putting a greater emphasis on prosecuting individual executives who commit fraud, a senior official at the Department of Justice said Thursday.

DOJ is changing the incentive structure for companies negotiating with the government over cases of corporate wrongdoing, according to the official. The government will give credit to companies that come forward with information and names of individual executives involved in criminal activity, the official said.

“Timeliness for information about key individuals will be a key metric for prosecutors who are judging the credit companies get for their for their cooperation,” the official said. “If the company comes forward, people may go to jail, and that is the intent here. But the company itself on behalf of its shareholders may avoid a guilty plea.”

The Department it will also make it much more difficult for companies to get successive non-prosecution agreements. Now prosecutors will weigh the full range of a company’s prior conduct when making decisions about resolutions.

“Historically there was a concern that some companies might view resolutions with the Department of Justice as a cost of doing business and think there was a possibility of multiple successive non-prosecution agreements or deferred prosecution agreements,” the official said. “We’re trying to send a message that’s not the case.”

And the DOJ is also going to emphasize executive compensation claw-backs, so the executives who committed the fraud pay a price, not just the shareholders of the company when a corporation foots the bill for a fine. 

New rules are also expected on corporate compliance monitors, who are often tasked with making sure companies stay on their best behavior after misconduct.  

Deputy Attorney General Lisa Monaco will unveil the new policies in remarks at New York University Thursday evening.