A pervasive sense of uncertainty about America under the President set to be sworn in tomorrow has extended into almost every aspect of life. Perhaps due to his own past and lack of transparency, speculation abounds about potential changes to white-collar prosecution priorities and securities enforcement under a Trump administration. Anticipating what kind of impact a Trump presidency will have on white-collar criminal practice is largely guesswork given the new leader’s tendency towards imprecision. A look at Trump’s statements and actions to date, as well as his appointees, however, may provide some limited insight.
During the campaign, Trump strongly criticized his opponent for her ties to Wall Street, asserting that as President he was “not going to let Wall Street get away with murder.” At the same time, he repeatedly has stated that he wants to reduce regulations across all business and has threatened to eliminate legislation, such as the Dodd-Frank Act, which heavily regulates the financial industry, asserting disapprovingly that the regulators are running the banks. Shortly after he was elected, Trump released a video in which he promised he “will formulate a rule that says that for every one new regulation, two old regulations must be eliminated.”
Like much of Trump’s agenda, his statements appear incongruous and make it difficult to predict how Trump’s administration will interact with corporate America. Many assume that the Trump administration will be more pro-business than the past administration given the President-elect’s business background and the promise of lower taxes for corporate entities. This notion is supported in part by the fact that Trump has tapped numerous highly-regarded professionals associated with Goldman Sachs to direct the nation’s economic policy for the next four years, reviving the term “Government Sachs,” which was coined when Treasury secretary Henry Paulson, Jr., who had served as chief executive of Goldman Sachs prior to his government appointment, relied on his Goldman colleagues to help deal with the 2008 financial crisis.
The answer to whether federal prosecutors will continue in their strong pursuit of corporate wrongdoing largely will be in the hands of Alabama Senator Jeff Sessions, Trump’s pick to run the Justice Department. A longtime member of the Judiciary Committee, many believe Sessions, the Attorney General nominee, is likely to maintain Justice’s focus on white-collar crime. He has expressed support for the prosecution of corporations and individuals responsible for financial fraud and has spoken out against the resolution of these cases through non-prosecution or deferred prosecution agreements. Trump, on the other hand, has spoken out against the resolution of cases through the imposition of huge financial fines on corporations that, in his view, harm innocent shareholders. Accordingly, alternative sanctions against corporate entities, such as the imposition of monitors or other non-financial measures, are more likely under the Justice Department led by Sessions under Trump’s administration.
Nevertheless, nothing in Senator Sessions’ background suggests he will go easy on corporate America. Prosecutors like to bring big cases, and white-collar cases typically are the “big” ones. For this reason, the Justice Department and the accomplished professionals that constitute it are likely to persist in the pursuit of the individual prosecution of executives that have been ramped up in the last weeks of President Obama’s administration.
Even though the Justice Department likely is to continue to pursue white-collar crime (no one wants to be seen as soft on corporate wrongdoing), a priority shift in the types of cases it pursues likely is afoot. Like Trump, Sessions is a proponent of securing America’s borders, limiting legal immigration, and expelling undocumented immigrants. The pair’s strong views on immigration, coupled with Trump’s campaign promise to return manufacturing jobs to the United States and decrease reliance on foreign goods, makes likely an increase in the prosecution of companies that hire illegal labor, violate import/export laws, or fraudulently seek to avoid the payment of duties or tariffs.
A decrease in the number of criminal prosecutions and SEC civil enforcement actions directed at overseas bribery by American companies also may be on the horizon. The investigation and prosecution of corporations for violations of the Foreign Corrupt Practices Act has occupied a good deal of focus for both the Justice Department and the SEC in the past decade. A number of commentators predict that Trump will put on the brakes, based on his statements that the FCPA is a “horrible law” and puts American business at a disadvantage. Specifically, Trump believes that the prosecution of FCPA violations in places like Mexico, China, and other countries where the activities deemed illegal under the FCPA are perceived as the only way to get business done is “absolutely crazy.”
From The Insider Blog: White Collar Defense & Securities Enforcement.