DOJ Plans to Focus on Execs for Corporate Fraud

The Department of Justice is changing the ways federal prosecutors will handle white collar criminal cases, putting a greater emphasis on individual executives who commit fraud and changing the incentive structure for companies negotiating with the government over cases of corporate wrongdoing, a senior official at the Department of Justice said Thursday.

To encourage would-be whistleblowers, the government will give credit to companies that come forward with information and names of individual executives involved in criminal activity.  The department said it will also make it much more difficult for companies to get successive non-prosecution agreements.  Prosecutors will now weigh the full range of a company’s prior conduct when making decisions about resolutions.

Not only does this mean that more corporate executives could be put in jail for their company’s frauds, but the executives could be held personally accountable for hefty corporate fines. The DOJ is planning to emphasize executive compensation clawbacks, so that the executives who committed the fraud pay a price, not just the shareholders of the company when a corporation foots the bill for a fine.