(Reuters) — The U.S. Justice Department is rolling out a new policy aimed at pushing the costs of corporate crime into the pockets of executives, the latest in a series of changes at the agency under President Joe Biden.
The agency’s criminal division will give discounts on fines to companies trying to recover compensation from corporate criminals, Assistant Attorney General Lisa Monaco said at a conference Thursday. Any company seeking to resolve a US investigation must also implement a plan to include compliance goals as part of compensation and bonuses.
“Our goal is simple: to shift the burden of corporate misconduct away from shareholders, who often have no role in wrongdoing, to those who are directly responsible,”
; Monaco said at an American Bar Association conference in Miami.“Clawbacks are not a new idea but our understanding is that they have never really been deployed effectively or regularly,” Marshall Miller, deputy assistant attorney general at the DOJ, told Reuters in an interview at the conference.
The three-year pilot program will provide rebates tied to the amount of penalty repayments, and companies will be allowed to keep some of that money even if they fail to recover compensation provided they make a good faith attempt, Mr. Miller said.
“If you’re going to create a culture that calls out misconduct and promotes compliance, you need people to have skin in the game,” Mr. Miller.
The Securities and Exchange Commission last year dramatically expanded the scope of its clawback powers, which were created in 2002.
Monaco also outlined a plan to devote more resources to corporate crime with national security implications.
The DOJ will hire more than 25 new prosecutors to investigate sanctions evasion, export control violations and similar economic crimes, including a new position as chief corporate enforcement counsel within the agency’s National Security Division.
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