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Earlier this month, senior Department of Justice leadership announced new policies and programs intended to further its “carrot and sticks” approach to corporate criminal enforcement. A highly successful approach that has resulted in twice as many voluntary self-disclosures in 2023 when compared to 2021.
One of these policies is the introduction of the Pilot Whistleblower Rewards Program. Deputy Attorney General Lisa Monaco revealed this initiative, designed to incentivize individuals to reveal substantial financial misconduct. The whistleblowers can potentially get a share of the total forfeiture, effectively bridging the gaps left by other whistleblower programs.
But, not every whistleblower can expect a reward, as there are specific guidelines. Rewards are only up for grabs once all victims have been compensated, when the information provided is original, truthful and was unknown to the DOJ, if the whistleblower was not involved in the criminal activity, and if there was not an existing financial incentive to disclose. The DOJ may also place a monetary threshold to ensure focus remains on truly impactful actions.
This whistleblower program is expected to be particularly useful in uncovering foreign corruption cases, especially under the recently enacted Foreign Extortion Prevention Act.
Pivoting to the tech world, Monaco shared her thoughts on a rising concern: The misuse of artificial intelligence. Fraud can take many forms within AI, from price-fixing to market manipulation. In response, the DOJ aims to impose severe punishments in certain instances where AI is intentionally abuse. These punishments apply to both individuals and corporations.
Prosecutors are now tasked with examining how well a company’s program mitigates AI-related risks and this assessment will influence whether a company's compliance program is deemed effective. These insights should provide a roadmap for companies to manage AI-related risks within their overall compliance efforts.
In line with these updates, the Criminal Division will integrate AI-related risks into its guidance on the Evaluation of Corporate Compliance Programs. This follows the recent announcement of the “Justice AI” initiative, an effort to draw together stakeholders across industries to navigate the AI landscape.
The message from the Department of Justice is loud and clear: while AI's development can lead to incredible efficiency gains, its potential misuse is something they are ready to tackle. More than that, it is urging companies to go on the offensive, to revamp their compliance programs to identify and manage AI risks, which will guide their corporate resolution determinations.
As the Deputy Attorney General said, “If your company has had a recent brush with the law, now is the time to invest — and reinvest — in your compliance programs. I can assure you the price of committing another violation will be far higher than the cost of preventing one.”
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