USA Law and Practice Contributed by: Daniel J. Fetterman and Brian S. Choi, Kasowitz LLP
5.2 Compliance Programmes Companies are expected to maintain compliance pro - grammes to ensure compliance with the law. However, not all compliance programmes are the same. They are often tailored to the company’s specific business, risks, and size, among other factors. In any event, the existence of an effective and adequate compliance programme is a significant factor when prosecutors evaluate a charging decision. The Principles of Fed - eral Prosecution of Business Organizations instruct prosecutors that they should consider the “adequacy and effectiveness of the corporation’s compliance programme at the time of the offense, as well as at the time of the charging decision” and the corporation’s remedial efforts “to implement an adequate and effec - tive corporate compliance programme or to improve an existing one”. 5.3 Defences and Exceptions While the availability of a defence is dependent on the specific criminal offence, very often defendants will challenge the sufficiency of evidence regarding the element of “mens rea”. Many criminal statutes have a “specific intent” requirement that a defendant acted “wilfully” or “knowingly” in violating certain criminal statutes. Because intent is often proven through cir - cumstantial evidence, defendants will invoke chal - lenges to such evidence as part of their defence. 5.4 Whistle-Blower Protection In 2024, DOJ’s Criminal Division introduced a Cor - porate Whistleblower Awards Pilot Program designed to incentivise tips from whistle-blowers that would uncover corporate crime. Under the programme, any whistle-blower who provides the Criminal Division with original and truthful information about corporate misconduct that results in a successful forfeiture of assets may be eligible for an award. Thus, the bar - gain is simple – if the whistle-blower reports corpo - rate misconduct, and the tip results in a prosecution and forfeiture, then the whistle-blower may receive a financial award. The programme permits the whistle-blower to submit his or her tip anonymously through a lawyer. How - ever, even if a whistle-blower reports conduct with - out a lawyer – and is thus required to disclose his or her identity to DOJ – there are assurances that DOJ
mination. However, the District Court judge will handle the trial and will sentence the defendant in the event of a conviction. If a defendant is charged, his or her criminal case is typically brought in the venue where the crime occurred. The defendant may challenge the venue on the basis that he or she cannot receive a fair trial due to a prejudicial pool of jurors, pretrial publicity, or con - venience, and the court will ultimately decide whether At the federal level, criminal cases are tried before a jury of 12 citizens. At the outset of a trial, the parties will have an opportunity to engage in a screening pro - cess called “voir dire”, where they can question and evaluate potential jurors before empanelling a jury. 5. Corporate Liability, Compliance and Defences 5.1 Corporate and Individual Liability Under US law, companies are deemed to act through their agents and employees. If a company is charged with committing a crime, it is because its agents and employees engaged in criminal conduct when acting in the course of their agency or employment. Thus, companies and individuals may be prosecuted con - currently. More often, a company will seek to avoid the risk of a trial and enter into a negotiated resolution, such as a deferred prosecution agreement or a plea to reduced charges. the venue is proper. 4.5 Trial by Jury As a general matter, companies are distinct legal enti - ties and thus are not liable for one another’s conduct. However, under principles of agency law, there are instances in which a parent company may be liable for the actions of its subsidiary. Courts will evaluate the degree of control the parent had over the subsidi - ary – or whether the subsidiary was an alter-ego of the parent – and played an active role in the subsidiary’s activities forming the basis of any criminal charge. This is a fact-specific analysis.
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