SDNY’s Recent Corporate Self-Disclosure Policy: Can Anything Be Learned From The First Conditional Declination?

Summary

Less than three months after its launch, the Southern District of New York (SDNY) has produced its first publicly confirmed outcome under its new Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes (the SDNY Program). Just weeks after Telekom Malaysia Berhad, Malaysia’s national telecommunications provider, self-reported internal fraud to the SDNY, three of its former senior managers were indicted for allegedly misappropriating over $20 million of company assets; the company, in turn, received a conditional declination of charges.

The speed of the outcome—arrests occurring within two to three weeks of the self-report, and a public indictment unsealed six weeks later—is a concrete indication that the SDNY’s promise of a swift and lenient resolution for companies is operative. But the publicly available facts about this case raise questions as to why a company in this posture would need a declination when it does not appear that the company