What mechanisms are available to resolve a government investigation?
There are several mechanisms. In the criminal context, guilty pleas, deferred prosecution agreements (ie, filing criminal charges, the pursuit of which is deferred for a specified period) and non-prosecution agreements are available. In the civil context, consent orders, cease-and-desist orders, and other similar forms of civil settlement are available. These typically involve the payment of a fine, a requirement that the company not engage in further similar misconduct and a requirement that the company implement a more robust compliance programme (see, for example, Securities and Exchange Commission v Amec Foster Wheeler Limited, 25 June 2021). Recent guidance from the Biden administration, discussed further below, emphasised that any company entering into a deferred prosecution agreement or non-prosecution agreement would be monitored closely during the term of the agreement to ensure its compliance.Admission of wrongdoing
Is an admission of wrongdoing by the target business required? Can that admission be used against the target in other contexts, such as related civil litigation?
Ordinarily, a company admits to a statement of facts, which can be used against the company in related civil litigation.Civil penalties
What civil penalties can be imposed on businesses?
Corporations can receive a monetary fine, have profits stemming from the misconduct disgorged, be subject to compliance requirements and have an independent compliance monitor imposed. Such penalties do not significantly differ from criminal penalties, therefore penalties are often offset in cases involving both a civil and criminal settlement. Recent guidance from the Biden administration makes the use of independent compliance monitors more likely going forward.Criminal penalties
What criminal penalties can be imposed on businesses?
Corporations can receive a monetary fine, have profits stemming from the misconduct disgorged, be subject to compliance requirements and have an independent compliance monitor imposed.Sentencing regime
What is the applicable sentencing regime for businesses?
Federal courts consider the United States Sentencing Guidelines when formulating an appropriate sentence for a corporation. These guidelines are discretionary but influential.Future participation
What does an admission of wrongdoing mean for the business’s future participation in particular ventures or industries?
An admission of wrongdoing by a company can, in certain circumstances, cause the company to be suspended or debarred from governmental contracting. It can also cause the company to lose other governmental privileges, such as preferential filing status with the Securities and Exchange Commission or its qualified pension asset manager status with the Department of Labor.