DOJ Says More Companies Are Disclosing Illegal Activity

The Department of Justice (DOJ) says more companies are voluntarily disclosing illegal activity after the department upped rewards for doing so.

Assistant Attorney General Kenneth Polite Jr. said the criminal division has already seen an increase in the number of corporate disclosures since the announcement of an expanded policy.

Under the policy, companies that disclose wrongdoing to the Justice Department, fully cooperate and fix underlying problems are eligible for discounts on financial penalties or even a promise that prosecutors won’t bring a case altogether.

Polite said the criminal division is also looking into increasing visibility into its enforcement actions, including in how it selects monitors in settlements and how and when it charges individual executives. 

“At the end of the day, chief compliance officers have to be one of the voices that sign off on these resolutions,” he said.

“What you’re hoping to see is moving away from the CCO or compliance division being siloed.”

Deputy Attorney General Lisa Monaco last year said she was directing other components of the Justice Department to create their own self-disclosure policies, as part of an effort to increase investigations into corporate crime.

In an announcement earlier this year, Polite said the criminal division would formally expand the fraud section’s self-disclosure program to apply to other types of white-collar crime, per WSJ.

Today, retail investors are looking for solutions to the daily manipulation seen in the markets as stocks tank despite healthy buying pressure.

SEC Issues Record Breaking $279 Million Whistleblower Award

In May, the Securities and Exchange Commission said it awarded nearly $279 million to a whistleblower who helped the regulator and other agencies bring enforcement actions, the biggest award ever.

Under SEC rules, a whistleblower can receive an award of between 10% and 30% of the fines collected in SEC civil-enforcement actions and related actions from other enforcement agencies resulting from a tip, assuming the SEC collects more than $1 million.

The whistleblower voluntarily provided original information to the SEC that led to a successful enforcement action by the regulator as well as two related actions, according to the award order. 

Although the SEC said it already had opened a probe of the unnamed company and its staff were aware of potential misconduct there, the agency credited the whistleblower’s information with expanding its probe and for providing ongoing assistance through written submissions and interviews.

The SEC said it also determined that related actions by other agencies were based in part on the same information provided by the whistleblower, who also provided it to another unnamed agency.

The cooperation with other agencies and their subsequent enforcement actions increased the award amount.

“This award will have a massive chilling effect on Wall Street frauds,” said whistleblower attorney Stephen M. Kohn, who isn’t involved in the case.

While the DOJ says more companies are disclosing illegal activity, it looks like the same can be said about the SEC.

Retail investors call for high profile companies such Citadel for a deep investigation surrounding their long history of market manipulation.

Read: Citadel Draws Fresh Scrutiny from SEC in New Risky Bets

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