The U.S. Justice Department will use a "carrots and sticks" approach to combat corporate crime by encouraging companies to report and prevent misconduct while enhancing penalties for repeat offenders, reports Reuters. Deputy Attorney General Lisa Monaco said DOJ will make it harder for companies to enter into settlements that defer or waive prosecution, and reward companies after learning of misconduct. Between 10 and 20 percent of all significant corporate criminal resolutions involve repeat offenders. Monaco said that the new policy would "shift the burden of corporate financial penalties away from shareholders — who frequently play no role in misconduct — onto those who are more directly responsible." Companies that voluntarily report misconduct and cooperate will not be required to plead guilty and will be spared from hefty fines.
In October, DOJ issued new rules that require companies to name all people involved in misconduct to get credit for cooperation. The Biden Justice Department toughened the federal stance toward corporate offenders. In comparison, prosecutions fell to an all-time low under former President Trump. Since President Biden took office, federal prosecutors have brought racketeering charges against the founder of Archegos Capital Management and secured a guilty plea from a unit of Allianz SE for investment fund fraud.