Benesch - How DOJ’s Safe Harbor Policy Alters the Calculus for M&A Due Diligence

Since at least the adoption of the organizational Federal Sentencing Guidelines in 1991, the government has encouraged companies to adopt an effective compliance program that prevents and deters misconduct. Over the past several years, however, the United States Department of Justice has placed increasing emphasis on the importance of developing an effective compliance program, and to the extent that a compliance program could have been considered a luxury in the past, they are now essential for businesses. DOJ’s pronouncements over the past five years have progressively heightened expectations for compliance programs, beginning with the Justice Department’s 2019 guidance on evaluation of corporate compliance programs in criminal antitrust investigations, the revision of its Foreign Corrupt Practices Act resource guide, and 2022 revisions to its corporate criminal enforcement policies. Now, the Justice Department has raised the bar again with its adoption of a safe harbor policy relating to the discovery of criminal wrongdoing uncovered in the M&A process.

In October 2023, the Deputy Attorney General, Lisa Monaco, announced a new Department-wide policy. It encourages voluntary self-disclosure of criminal misconduct discovered during pre- or post-acquisition diligence and integration, and it further incentivizes organizations to invest in robust compliance programs.

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Contact the authors for more information - Marisa T. Darden and Matthew David Ridings.