The US Department of Justice (DOJ) has made a noteworthy policy announcement targeting corporations that are participating in mergers and acquisitions. At the heart of this policy is a plan to reward corporations with robust due diligence and compliance programs.
Promoting proactive legal action, the DOJ has created a “safe harbor” period. Under this policy, acquiring companies that promptly and voluntarily disclose any criminal misconduct they discover within the acquired entity during this period will receive favorable treatment.
This is not a simple ticket to immunity, as participating companies are expected to cooperate with all ensuing investigations,
and must engage in requisite, timely, and appropriate remediation, restitution, and disgorgement activities. If they successfully comply with these requirements, the DOJ will receive the presumption of a declination.
This move by the DOJ is an important strategic effort that underscores the value of transparency and due diligence in the corporate world, especially in the context of mergers and acquisitions. By encouraging a voluntary self-disclosure framework, DOJ’s policy helps
in establishing effective legal compliance routines among corporations.
The new line of action signals a direct approach from the DOJ towards retaining a measure of integrity in business operations and adds a layer of certainty for corporations considering future merger and acquisition activities. Legal experts have seen this move as a positive step in reinforcing responsible corporate behavior.