On February 24, 2026, the U.S. Attorney’s Office for the Southern District of New York (“Office”) announced a new Corporate Enforcement and Voluntary Self-Disclosure Program for illegal activity involving fraud and financial misconduct (“Program”). While the Office already maintains a voluntary corporate self-disclosure program, the new Program’s stated purpose is to improve corporate self-reporting to “root out wrongdoing more quickly” and “strengthen the integrity of the financial markets” while simultaneously establishing “clear guidelines and predictable treatment for companies” that promptly disclose criminal activity and fully cooperate with law enforcement.
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The Program is relevant for all companies operating in the U.S., reflecting the broader shift in approach spearheaded by the Criminal Division of the U.S. Department of Justice, which expanded its corporate enforcement self-disclosure program in 2025 to review all existing government-imposed corporate cooperation programs for early termination, limit such terms for eligible companies to generally no more than three years going forward, and provide the presumption of a declination of prosecution if certain criteria are met.2
Eligibility criteria
Under the Program, the Office considers six categories of criteria when determining whether a self-reporting company is eligible for a declination to prosecute. This includes: (i) the category of conduct reported; (ii) timely self-reporting of misconduct, (iii) a commitment to full cooperation, (iv) remediation of harm, (v) restitution to victims of such harm, and (vi) the absence of aggravating circumstances.3
A qualifying company that self-reports a qualifying illegal activity and cooperates fully, including a commitment to report ongoing criminal conduct for three years, may seek a conditional declination letter. After a company has self-reported, the Office will issue a conditional declination letter stating its intent to decline prosecution. The declination is conditioned on the company’s cooperation with the Office’s investigation, and satisfaction of the eligibility requirements, including full victim restitution. Upon the fulfillment of its cooperation, remediation, and restitution, the Office will issue a final declination notice concluding the matter without criminal charges.
Categories of misconduct. The misconduct reported must fall within a list of eligible illegal activities, including various types of fraud, false statements, and other “willful violations of the Securities Act of 1933, Securities Exchange Act of 1934, the Commodity Exchange Act, Investment Advisers Act of 1940, and Investment Company Act of 1940 that undermine the integrity of financial markets or harm customers, competitors, or market participants.”4 Importantly, companies are not eligible for the Program if the disclosed—and otherwise eligible—crime involves a nexus to terrorism, sanctions evasion, foreign corruption, trafficking, physical violence, or other aggravating circumstances.5
Timeliness of disclosure. To be timely, a company that suspects wrongdoing must self-report before the company receives a document request or grand jury subpoena from a law enforcement agency or regulator, and before it learns of the existence of a government investigation.6 Moreover, the Office makes clear that it will “treat decisions not to self-report as weighing heavily against any future declination request.”7 Relatedly, if a company does not report conduct prior to learning of a government investigation, the Office will operate on a presumption that the only appropriate resolution will take the form of a guilty plea, deferred prosecution agreement, or non-prosecution agreement accompanied by a statement of facts and the payment of restitution, forfeiture, and fines.8 However, certain circumstances will not disqualify a company from receiving a declination under the Program. A company may still receive the benefit of self-reporting even if it has knowledge of a whistleblower submission internally or to a government agency, or if the press has already reported the illegal activity (provided there is no reporting of a government investigation into that illegal activity).9
Full cooperation. The Office provided an extensive list of exemplary cooperation, including but not limited to: (i) identifying, preserving, and sharing all relevant information and documentation; (ii) sharing the non-privileged results of internal investigations; (iii) making employees, directors, officers, and agents available for interview; (iv) consenting to all disclosures the Office deems appropriate; and (v) committing to reporting all credible evidence or allegations of criminal conduct by the company or its employees to the Office for a period of three years.10
Remediation. Upon disclosure, the company must further commit to remediating the harm caused by the illegal activity before it may receive a conditional declination letter. Examples of remediation include implementing changes to the company’s compliance program, or suspending, terminating, or disciplining an employee, officer, or agent directly involved in the misconduct.
Restitution. Upon reporting illegal activity, the company must make restitution to all injured parties prior to receiving a final declination letter. A company’s restitution obligation extends to any party or class of parties that qualifies as a victim, which includes anyone who has suffered a loss, as defined by federal law. However, this obligation does require restitution payments to be made to any individuals or entities that have committed misconduct themselves.11
No aggravating circumstances. The existence of aggravating circumstances will render a company ineligible for a declination letter. Such circumstances include a nexus to terrorism, sanctions evasion, foreign corruption, sex trafficking, human trafficking, international drug cartels, slavery, forced labor, or physical violence.
Benefits of Self-Reporting Under the Program
The Program aims to provide clarity and consistency in enforcement, and it promises that eligible companies can expect conditional declination letters within two to three weeks of self-reporting, “giving the company, its management, and its shareholders clarity as to the outcome of the investigation at the outset.”12 However, after an initial declination is issued, the Program imposes a number of terms and conditions that eligible companies must meet for a favorable resolution of their case.13 Specifically, only after “completing its cooperation and remediation” does a participating company receive its final notice of declination.14
There are two significant benefits under the new Program: first, the Office has made clear that no financial penalties will be imposed on an eligible company beyond restitution. Second, and perhaps most notably, an eligible company will not be required to employ or be supervised by a monitor as part of a resolution.15
Key takeaways
While the requirements under the Program are stringent, the financial and reputational benefits that result from a declination are significant. Companies, particularly those operating in emerging sectors, should consider evaluating and updating their internal reporting systems and investigation protocols that allow for prompt self-reporting and full cooperation, and if necessary, engaging counsel to assist in building out compliance and readiness protocols.
Footnotes
2. Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime, U.S. Department of Justice Criminal Division 5–7 (May 12, 2025), https://www.justice.gov/criminal/media/1400046/dl?inline; Criminal Division Corporate Enforcement, U.S. Department of Justice Criminal Division (updated October 1, 2025), https://www.justice.gov/criminal/criminal-division-corporate-enforcement.
3. SDNY 2026 Corporate Enforcement Program, supra note 1, at 1.
