Companies can face more lenient treatment if they report to prosecutors potential criminal misconduct uncovered during the merger and acquisition process, a senior official at the Justice Department said, the Wall Street Journal reported. Under a new policy announced yesterday, an acquiring company that discloses potential wrongdoing at a company being acquired within six months of the deal closing date — and fully cooperates and fixes the underlying problems within a year of closing—can presume it won’t be prosecuted by the Justice Department. “Our goal is simple: Good companies — those that invest in strong compliance programs — will not be penalized for lawfully acquiring companies when they do their due diligence and discover and self-disclose misconduct,” Deputy Attorney General Lisa Monaco said in remarks delivered remotely at the Society of Corporate Compliance and Ethics conference in Chicago on Wednesday. The policy would be implemented in all divisions of the Justice Department but would only apply to “criminal conduct discovered in bona fide, arm’s-length M&A transactions,” Monaco said. This policy won’t affect civil merger enforcement, she added.
