• On February 24, 2026, the United States Attorney’s Office for the Southern District of New York announced a revised and expanded “Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes” (the “Program”) that creates incentives for companies to report potential criminal conduct involving certain types of financial malfeasance.
• The Program offers a roadmap to securing a declination of corporate criminal charges if the company fully cooperates, remediates and provides full restitution to all victims. Importantly, the Program introduces the novel concept of a “conditional declination” at the outset of an investigation. At the same time, the Program imposes rigorous terms to obtain that outcome and an ongoing reporting requirement to keep it.
• The Program makes clear that companies that do not self-report face a “strong presumption” against a declination. That statement can be read as a warning shot alerting companies that failing to self-report will lead to a criminal disposition in all but the most extraordinary circumstances.

On February 24, 2026, the United States Attorney’s Office for the Southern District of New York (the “Office”) announced a revised and expanded “Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes” (the “Program”) that creates new incentives for companies to report potential criminal conduct involving certain types of financial malfeasance to the Office. The Program comes on the heels of other Department of Justice programs that encourage self-disclosure by providing a measure of certainty that such disclosure will provide tangible benefits, but appears to go further by offering both greater clarity about the potential benefits and more extensive obligations. The Program offers a roadmap to securing a declination of corporate criminal charges and introduces the novel concept of a “conditional declination” at the outset of an investigation. At the same time, the Program imposes rigorous terms to obtain that outcome and a new, ongoing reporting requirement to keep it.

The Program also makes clear that companies that do not self-report face a “strong presumption” against a declination. That statement, although placed at the end of the new policy, can be read as a warning shot alerting companies that failing to self-report will lead to a criminal disposition in all but the most extraordinary circumstances. That, alone, should impact companies’ evaluation of whether to self-report when they have identified potential evidence of criminal conduct.

Additionally, while the contours of the Program align with the DOJ Criminal Division’s “Corporate Enforcement and Voluntary Self-Disclosure Policy” (the “CEP”), any company contemplating self-disclosure to the Office should consider carefully the provisions of both DOJ’s CEP and the Office’s expanded program. It remains to be seen whether other U.S. Attorney’s Offices will follow the Office’s lead and either adopt the same or a similar program, or expound their own.

Key Elements of the Program. The Program outlines a path for a company that discovers potentially criminal conduct to obtain a declination of prosecution. This process builds upon the principles of voluntary disclosure, cooperation, remediation, and payment of restitution that DOJ long has promoted, while providing greater clarity for companies even at the outset.

• First, to be eligible for the Program, a company must self-report promptly upon learning of potential criminal misconduct, prior to receiving a grand jury subpoena or document request from enforcement authorities or otherwise becoming aware of a government investigation. The company’s disclosure must include “all known facts about the nature of the misconduct, the individuals involved, and any affected parties.”

• Significantly, once a company self-reports, the Office will issue “a conditional declination letter stating its intent to decline prosecution against the company, conditioned on the company’s cooperation with the Office’s investigation and satisfaction of all eligibility requirements, including full restitution of victim losses.” Importantly, the company must commit to remediate the harm caused by the criminal activity before the Office will issue the conditional declination letter. The prospect of a conditional declination at the beginning of the process is a major new “carrot” clearly intended to incentivize more companies to self-report.

• A company that obtains a “conditional declination” must cooperate fully with the Office’s investigation. The Program provides a detailed definition of “full cooperation,” and makes clear that it must include, among other steps: (a) complete and timely disclosure of all relevant, non-privileged information and documentation; (b) identification of witnesses and culpable individuals; (c) sharing of non-privileged results of internal investigations; (d) using “best efforts” to make employees available for interviews and testimony, and to ensure that employees provide complete, candid, and truthful information; and (e) making “all efforts” to mitigate the impact of foreign data privacy and blocking statutes.

• The Program includes a significant additional obligation, absent from the Criminal Division’s CEP: for a period of three years, a cooperating company must proactively disclose to the Office “all credible evidence or allegations of criminal conduct by the company or any of its employees that relates to violations of U.S. laws”—regardless of whether such evidence or allegations are related to the wrongdoing that the company initially disclosed. This obligation also is not subject to any geographic limitation and therefore would appear to require reporting potential criminal conduct that occurs anywhere in the world, provided that such conduct may violate U.S. law.

• The company must remediate the harm of the illegal activity. Such remediation may include enhancing the company’s compliance program and taking disciplinary action against employees, officers, directors, or agents.

• The company must provide full restitution to all parties harmed by the wrongdoing.

• Once the company has completed its cooperation, remediation, and restitution obligations, the Office will issue a final notice of declination.

The Program is limited to certain defined categories of financial misconduct, including fraud by a company or anyone acting on behalf of a company; fraud in connection with securities, commodities, or digital assets; false statements or fraud involving an auditor or federal financial regulator; and other willful violations of the federal securities laws. Notably, the Program does not appear to cover activity involving money laundering or bribery. Moreover, conduct that otherwise would be covered by the Program will be rendered ineligible if it involves any “aggravating circumstances,” defined as “any nexus to terrorism, sanctions evasion, foreign corruption, sex trafficking, human trafficking and smuggling, international drug cartels, slavery, forced labor, or physical violence,” or related financing or money laundering.

Importantly, the Office will not treat the seriousness of the conduct at issue, the severity of the harm caused, the involvement of senior executives in the misconduct, or a company’s criminal history as factors that disqualify a self-reporting company from obtaining a declination under the Program. This is an important point that distinguishes the Program from the Criminal Division’s CEP and seems designed to encourage companies to self-report to the Office under circumstances when it might not be clear they can take advantage of the benefits of the CEP.

Implications for Companies. For any company that discovers financial misconduct and is assessing whether to self-report, the Program offers a path to a potentially appealing outcome—a full declination of prosecution (and a “conditional declination” at the outset of the investigation)—while imposing rigorous criteria for the company to achieve that outcome. Among the factors that companies should consider are the following:

• The Program’s extensive cooperation requirements set a high bar. In particular, it is unclear how the Office will measure a company’s “best efforts” to secure employee testimony and other evidence. Such efforts by a company to obtain employee testimony and produce evidence from outside the United States may present practical or even constitutional concerns, and might implicate the laws of other countries where the company operates. The Office retains significant discretion to determine whether a company has met its cooperation obligations.

• The three-year obligation to report evidence or allegations of criminal conduct, including unrelated conduct that would not be covered by the Program, is significant. Such a reporting obligation historically has not been associated with a declination of prosecution, and more closely resembles the reporting obligations associated with a criminal resolution pursuant to a guilty plea, deferred prosecution agreement, or non-prosecution agreement. This obligation also would require the company to report newly discovered criminal misconduct to the Office, as opposed to other enforcement authorities, exposing it to additional prosecutorial scrutiny for conduct that may not be covered by the Program.

• The Program requires full restitution to all “victims” before the company can receive a final declination, irrespective of how widespread the criminal conduct was and whether there were any failures of corporate governance. Indeed, the Program requires commitment to restitution before the company might have even a preliminary handle on the scope of the wrongdoing or extent of potential damages. It similarly remains an open issue regarding how, or under what statute, a “victim” will be defined or how restitution will be measured. Often in cases of financial misconduct, particularly accounting fraud and disclosure cases with potential shareholder harm and possible class actions, calculation of loss can be complicated and disputed.

• Companies that identify financial misconduct for potential disclosure should assess whether it falls into any of the Program’s exclusions. For example, by excluding wrongdoing with “any nexus” to foreign corruption, sanctions evasion, or cartel activity, the Program reduces the incentives for a company to self-disclose such misconduct to the Office—even though DOJ has declared cartel-related crime, in particular, to be an enforcement priority. Companies remain incentivized to report such misconduct to DOJ’s Criminal Division pursuant to the CEP, however.

This publication is for general information purposes only. It is not intended to provide, nor is it to be used as, a substitute for legal advice. In some jurisdictions it may be considered attorney advertising.