Corporate Crime and Executive Compensation Clawbacks

I recently attended a WWCDA (Women’s White-Collar Defense Association) webinar on corporate asset forfeiture which was part of a four-part Global Enforcement Trends & Compliance Best Practices Series. The panel featured DOJ officials, corporate defense attorneys, and other experts affiliated with antitrust, securities fraud, corruption, export enforcement, and asset forfeiture actions. This panel wasn’t messing around with their messaging that the powers that be are fed up with corporate malfeasance and that companies need to up their compliance game.

One of the major topics discussed was Asst. AG, Lisa Monaco’s mandate that moving forward, the trend toward fewer DPAs (Deferred Prosecution Agreements) for corporations, and more accountability toward company officers will escalate. With that comes pushing executive compensation clawbacks to help enforce company culture, and to deter/punish risky and or criminal behavior by top executives. In other words, while a company’s willingness to enforce compliance policies could continue to lessen the legal peril of a corporation, it will not deter the DOJ from bringing criminal charges against employees or from mandating that companies perform compensation clawbacks for officers of a company, even if they cannot be proven to be culpable. Is this an unfair stance? Welcome to being in the company of the white-collar innocent spouse who is routinely held financially accountable for their spouse’s financial crime despite not having any culpability! Punitive damages toward innocent parties takes guilt by association to a new level, and with more individuals being held accountable for corporate crimes, more innocent families than ever will be caught in the wide net of white-collar criminal prosecution, and through no fault of their own, will face dire economic and emotional peril in these processes.

Because marriage is a legally binding contract, the financial crime of one spouse severely impacts the other. It is a little-known fact that all marital assets are at risk of being seized (including untainted assets) at the onset of a white-collar investigation and held by a court appointed monitor for forfeiture to be dispensed for restitution and other penalties associated with a perp’s criminal actions at sentencing. These civil seizures are performed without due process for the innocent spouse joint asset owner and leaves a perp’s family destitute. Additionally, the non-offending spouse is held liable for unreported taxes on ill-gotten gains (which were also not reported to the non-offending spouse) when filing jointly with an offending spouse. Clawbacks for innocent spouses have been performed routinely through the years and nobody bats an eye. Yet, those in the corporate arena will take notice now that similar actions are considered unfair and financially punitive to non-offending company officers.

While discussing the current climate of compliance programming, one of the panelists shared the alarming fact that according to the DOJ, 90% of corporations either do not have a compliance program at all, or do not have effective compliance programming in place. Is it any wonder then why occupational crime continues to escalate? The key to more effective compliance is not a better defense through tech, but a more results driven approach to deterrence that focuses on the human experience. The DOJ has lamented the profound gap between tech and human interaction regarding compliance programming and companies are beginning to see the value in this approach. The White-Collar Wives Project has created a comprehensive novel compliance strategy that is based on a behind the scenes, up close and personal study of over two hundred white-collar criminal investigations and prosecutions. A New Perspective on Deterrence is the missing link to effective compliance programming. For more information please contact Lisa Lawler at lawlerlisa1@gmail.com.

Grassroots activism has been impacting society for centuries by changing the social dynamics that pose a significant threat to the quality of life. Occupational crimes not only pose a significant threat to companies, but also, to families. The White-Collar Wives Project represents white-collar innocent spouses from around the world who, along with their children, have had to endure severe far reaching, long-lasting, and highly punitive legal and economic repercussions as a result of their spouse’s occupational crime. Lest there be any doubt, we are not little ladies with a cause, but highly vested compliance stakeholders who are at war with occupational crime.

The White-Collar Wives Project has been featured in the New York Times, The American Bar Association Journal, Forbes, Market Watch, Bravo/Oxygen, the AFCE, and esteemed national podcasts.