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US Justice Dept wants execs to foot bill for corporate misconduct

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© Reuters. FILE PHOTO: Lisa Monaco, deputy U.S. attorney general, speaks during the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Police Executives Forum in Washington, D.C., U.S., on Friday, May 6, 2022. Sarah Silbiger/Pool via REUTERS

By Chris Prentice

MIAMI (Reuters) – The U.S. Justice Department is rolling out a new policy aimed at pushing the cost of corporate crime into the pockets of executives, the latest in a series of changes at the agency under President Joe Biden.

The agency’s criminal division will give discounts on fines for companies that seek to claw back compensation from corporate wrongdoers, Deputy Attorney General Lisa Monaco said at a conference on Thursday. Any company seeking to resolve a U.S. investigation will also have to implement a plan to include compliance goals as part of compensation and bonuses.

“Our goal is simple: to shift the burden of corporate wrongdoing away from shareholders, who frequently play no role in misconduct, onto those directly responsible,” Monaco said at an American Bar Association conference in Miami.

Companies often pay fines to U.S. authorities to resolve investigations into wrongdoing, a practice that some say further harms shareholders but leaves corporate executives unscathed.

Monaco also detailed a plan to dedicate more resources to corporate crime with national security implications.

The Justice Department will hire more than 25 new prosecutors to investigate sanctions evasion, export control violations and similar economic crimes, including a new position of chief counsel for corporate enforcement within the agency’s national security division.

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