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Steve Fagell

Steve Fagell represents companies, boards of directors, and senior executives in government enforcement matters, internal investigations, and shareholder litigation. He focuses on criminal and civil regulatory matters presenting complex legal, political, and reputational risks. He routinely represents clients before the US Department of Justice, Securities and Exchange Commission, and other law enforcement and regulatory agencies. Mr. Fagell has advised clients in the life sciences, financial services, defense, technology, energy, and manufacturing industries on a variety of white collar matters, including those relating to foreign bribery, corporate whistleblowers, insider trading, accounting fraud, banking, government contracting, export controls, and transnational tax issues.

October 17, 2023, Covington Alert

What You Need to Know

  • On October 4, 2023, Deputy Attorney General Lisa Monaco provided new and expanded policy guidance on corporate criminal enforcement, announcing a new Mergers and Acquisitions Safe Harbor Policy (“Safe Harbor Policy”).
  • The Safe Harbor Policy provides acquiring companies an opportunity to avoid criminal charges if they voluntarily self-disclose misconduct at acquired companies within six months of a merger or acquisition (“M&A”), fully cooperate in any DOJ investigation, engage in timely and appropriate remediation within one year of the transaction closing date, and pay restitution or disgorgement, as appropriate.
  • The Safe Harbor Policy—which we expect will be formalized in writing and incorporated into the Justice Manual—appears to draw heavily on policies and guidance from the Criminal Division dating back to 2008, but that will now be formalized, clarified, and applied across the Department, with different parts of the Department “tailor[ing] its application . . . to fit their specific enforcement regime.”
  • As with all of the Department’s recent policy announcements concerning the benefits of voluntary disclosure, significant questions remain. We discuss some of those below, and we will be watching to see how DOJ applies the Safe Harbor Policy in practice. At a minimum, however, companies should ensure that their pre- and post-closing diligence and integration processes are designed to quickly identify legacy or ongoing misconduct at acquired companies so that they may have an opportunity to consider the expected benefits and burdens associated with a voluntary disclosure under the Safe Harbor Policy.
  • In addition to announcing the Safe Harbor Policy, Deputy Attorney General Monaco noted a “dramatic” expansion in national security enforcement, new enforcement tools that the Department is deploying, continued focus on incentivizing companies to seek compensation clawbacks from individual wrongdoers, and even more policy changes to come. Deputy Attorney General Monaco’s announcement follows recent shifts in enforcement remedies sought by the Department, such as divestiture in certain criminal antitrust cases—an unprecedented remedial measure.

Continue Reading DOJ Provides Further Voluntary Disclosure Incentives, This Time Linked to M&A Transactions, and Signals Other Areas of Focus