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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Commercial Law

Date & Time
  • event Date

    Wednesday, May 29, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE webinar will discuss the new safe harbor policy from the Department of Justice (DOJ) incentivizing acquiring companies in M&A transactions to voluntarily self-disclose criminal misconduct they discover through the acquisition of a target. The panel will provide an overview of the new policy, the conditions for application of the safe harbor, the increased importance of compliance and due diligence, and practical guidance for advising clients who are weighing the benefits versus the risks of self-disclosure.

Faculty

Christopher L. Nasson
Partner
K&L Gates, LLP

An experienced litigator and former federal prosecutor, Mr. Nasson's practice focuses on regulatory enforcement, white collar criminal defense, internal investigations, and related business and securities litigation. He represents corporations and individuals in criminal and civil matters brought by the Department of Justice, Securities and Exchange Commission, Internal Revenue Service, and other federal, state, and foreign enforcement agencies. An accomplished trial and appellate attorney, Mr. Nasson has had considerable success dissuading governmental agencies from pursuing any enforcement or criminal action against his clients. He also counsels clients on risk mitigation strategies with respect to anti-corruption, sanctions, cybersecurity, and anti-money laundering issues.

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Patrick F. Linehan
Partner
Steptoe, LLP

Mr. Linehan's diverse practice focuses on representing corporate and individual clients in internal investigations, criminal investigations/trials and civil litigation. He has handled numerous internal investigations, including on behalf of Audit Committees and Special Litigation Committees, on GAAP and other accounting- and internal controls-related matters, employee misconduct matters, and regulatory violations in the government contracts, FDA/healthcare and economic sanctions/export control areas. Mr. Linehan has defended both corporate and individual clients in all phases of government-facing investigations and prosecutions against allegations of securities fraud and SEC/FINRA regulatory violations, False Claims Act violations, FDA and healthcare fraud, criminal Sherman Act violations, and tax fraud, among others. He has litigated, on behalf of both plaintiffs and defendants, civil cases in both federal and state courts and before arbitration panels spanning a broad range of areas, including securities fraud, breaches of fiduciary duty, employment-related matters, government contract disputes, False Claims Act, copyright, and general commercial matters.

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Description

On Oct. 4, 2023, the DOJ announced its new M&A safe harbor policy for voluntary self-disclosure of criminal conduct, which formalized a practice that had already been in place in specific M&A cases. The new safe harbor policy applies to criminal conduct discovered by acquirers during the course of M&A transactions. Acquiring companies that qualify under the safe harbor will be entitled to the presumption of a criminal declination, and the acquired company may also be available for cooperation credit if it meets certain criteria.

The safe harbor creates opportunities for buyers to address challenging compliance issues that they might inherit through an M&A deal, while also creating new pressures on buyers to thoroughly diligence the target companies' practices.

To qualify under this new policy, acquiring companies must self-disclose misconduct they uncover within six months from the date of closing, cooperate with the DOJ during their investigation, and undertake full remediation within one year from the date of closing. The policy does not apply to misconduct that was otherwise required to be disclosed by law, is publicly known, or already discovered by or disclosed to the DOJ. The policy also does not affect civil merger enforcement. More prompt disclosure may be required under the policy if it implicates national security concerns.

Meeting the tight timelines under the new policy to qualify for the presumption of declination requires proactive, comprehensive diligence both pre-closing and post-closing. Developing a robust integration plan, including compliance training, and establishing reporting channels for compliance-related issues can help position an acquirer to identify misconduct where diligence was limited during the acquisition process.

Listen as our authoritative panel discusses the DOJ's new safe harbor policy and provides practical guidance for advising M&A transactional parties about their enforcement risks and the potential awards of self-disclosure.

Outline

  1. Background
  2. Scope and conditions of the safe harbor
    1. Bona-fide, arms-length transactions
    2. Timelines for disclosure (six months) and remediation (12 months)
    3. Exceptions available in certain circumstances
    4. Aggravating factors and recidivism
  3. Importance of compliance and due diligence
  4. Assessing disclosure risks and rewards
  5. Impact of the new safe harbor policy on the acquired company
  6. Practical guidance and key takeaways

Benefits

The panel will address these and other key issues:

  • What types of violations does the new self-disclosure safe harbor cover?
  • What are the incentives for disclosing misconduct?
  • What are the disincentives for self-disclosure that still exist despite these new policies?
  • How should buyers and sellers structure their pre- and post-diligence procedures to address the new safe harbor policy?