U.S. AG William Barr Highlights DOJ and SEC Enforcement Cooperation
U.S. Attorney General William P. Barr described enforcement cooperation between the DOJ and SEC. In a speech at the SEC Criminal Coordination Conference, Mr. Barr highlighted:
(i) that the SEC and DOJ continue to coordinate challenges on "complex and difficult" cases, citing several recent cases relating to the Foreign Corrupt Practices Act (see previous coverage) and Ponzi schemes involving elder abuse;
(ii) the importance of continued collaboration, but also the collateral consequences that enforcement actions can have. He noted that these consequences may include the high cost to defend against an investigation, the cost to resolve an issue and the long-lasting impact that a case can have on a company. Mr. Barr stated that the DOJ "Policy on Coordination of Corporate Resolution Penalties" encourages the agency to consider the impact of all the penalties resulting from a case, including those from other law enforcement agencies. In alignment with this approach, he noted that the SEC issued a "Statement Regarding Offers of Settlement," which coordinates the agency's waiver application process with a resolution's final approval; and
(iii) his support for incentives to encourage ethical business practices and policies. He noted that the DOJ and SEC jointly published guidance on the U.S. Foreign Corrupt Practices Act ("FCPA") and recently announced revisions to the FCPA Corporate Enforcement Policy that create incentives for "good corporate behavior." Mr. Barr added that the Policy clarifies that if a company displays good corporate behavior, the DOJ can choose to "act in deference" to a parallel SEC action against the company.
Commentary
The SEC and DOJ have a long history of working together and the SEC's Criminal Coordination Conference where Attorney General Barr gave his speech is an example of this close relationship. However, AG Barr's speech had a noticeably less aggressive tone than government officials sometimes take on this topic. Instead, the speech largely focused on law enforcement being mindful of the impact its investigations can have on companies and ways to reward companies for having good business practices and cooperating. While his example of the DOJ's "policy against piling-on" is consistent with the SEC's recent approach to remedies, his discussion of the costs of defending investigations and the need to make better choices about what investigations to pursue and the long-term impact they can have on companies is a welcome acknowledgment. It would be even better news if AG Barr's approach leads to noticeable change in these areas.