SDNY's Revised Voluntary Self-Disclosure Program Offers New Carrots

Executive Summary

• What's new. Federal prosecutors in the Southern District of New York (SDNY) announced changes to their policy encouraging voluntary self-disclosure of violations. Conditional letters of declination will be provided early on, and companies can be credited with self-disclosure even if the information they provide is known to the government, provided the company believes it was not known.
• Why it matters. The earlier issuance of conditional letters of declination will provide companies with greater certainty sooner, and allowing for a company's good faith belief that information is unknown to the government will make self-disclosure more attractive.
• What to do next. Even assuming that the SDNY is suggesting that the forthcoming policy increases the incentives, self-reporting is rarely a simple decision, and companies should be careful to weigh the pros and cons.