Jay Clayton, U.S. Attorney for the Southern District of New York | Department of Justice
The U.S. Attorney's Office for the Southern District of New York has introduced a new Corporate Enforcement and Voluntary Self-Disclosure Program aimed at addressing fraud and financial misconduct that affects market integrity. The initiative was announced by Jay Clayton, U.S. Attorney for the district.
The program is designed to encourage companies to voluntarily report illegal activities, cooperate with law enforcement, and take corrective actions in order to protect investors and maintain trust in financial markets. Companies that meet the program’s requirements—including prompt self-reporting, full cooperation, ongoing reporting for three years, and remediation—will be eligible for a conditional declination letter soon after disclosure. Once all obligations are fulfilled, including restitution to victims, a final declination letter will be issued, resolving the matter without criminal charges.
Jay Clayton stated: “The self-reporting program rests on a simple principle: prompt corporate disclosure and cooperation in rooting out and remedying wrongdoing is in the best interest of victims, shareholders, employees, and our markets generally,” said U.S. Attorney Jay Clayton. “When companies do the right thing—report quickly, cooperate fully, and remediate harm—they should know where they stand. With this program, we expect there will be strong alignment among corporate fiduciary duties, corporate cooperation with the Department of Justice, and the interests of victims, shareholders, and the public generally. To be sure, companies that choose not to cooperate proactively and are found to have engaged in criminal conduct, will face significant corporate consequences.”
This approach builds upon previous practices where voluntary disclosures were considered favorably during charging decisions. The office has already issued a conditional declination letter within one month of a company’s qualifying disclosure under this framework. Such disclosures also help focus efforts on holding individuals accountable; during Clayton’s tenure as U.S. Attorney, criminal charges have been brought against executives based on information from these reports.
Further details about eligibility criteria and model documents related to the new program can be found on the official website of the U.S. Attorney’s Office: https://www.justice.gov/usao-sdny/self-reporting-program.
