SDNY Announces Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes

On February 24, 2026, the US Attorney’s Office for the Southern District of New York (“SDNY”) announced a new Corporate Enforcement and Voluntary Self-Disclosure Program (the “Program”) for illegal activity involving fraud and financial misconduct affecting market integrity.

The Program establishes a structured path to a declination of prosecution for eligible companies that voluntarily self-report qualifying criminal conduct, fully cooperate, remediate harm, and provide restitution to victims. The program is consistent with—but builds on—Main Justice’s broader Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”).

The announcement reflects SDNY’s effort to formalize and provide greater transparency around its approach to corporate self-disclosure in financial fraud matters. In announcing the Program, US Attorney Jay Clayton stated that it is designed to ensure “strong alignment among corporate fiduciary duties, corporate cooperation with the Department of Justice, and the interests of victims, shareholders, and the public generally.”

Key Features of the Program

Two Stage Declination Process

Under the Program, an eligible company that makes a qualifying voluntary self-disclosure may receive a conditional declination letter shortly after disclosure. Qualifying companies can expect a conditional declination letter within two to three weeks of self-reporting. If the company satisfies its cooperation, remediation, restitution, and ongoing reporting commitments, SDNY will issue a final declination letter and conclude the matter without criminal charges. SDNY has indicated that it has already issued a conditional declination within one month of a qualifying disclosure.

Scope of covered conduct

The Program applies to specified categories of fraud and financial misconduct affecting market integrity, including: corporate fraud; fraud involving securities, commodities, or digital assets; fraud on auditors or financial regulators; and other willful violations of federal securities and investment laws that undermine market integrity or harm market participants. Conduct outside these categories may remain subject to other DOJ policies.

Timeliness and voluntariness, cooperation and remediation

To qualify, a company must make this disclosure before receiving a grand jury subpoena or document request and before learning of a government investigation. The disclosure must be substantive and include all known facts concerning the misconduct and individuals involved. The existence of whistleblower complaints or media reporting, alone, does not automatically disqualify a company, provided the company has not learned of a government investigation. This is a significant departure from prior voluntary-disclosure policies.

Companies must commit to and provide full cooperation, including identifying responsible individuals, preserving and producing relevant documents (including from non-email and ephemeral messaging platforms), and facilitating a resolution. The Program requires remediation of misconduct, disciplinary action where appropriate, and full restitution to victims as defined under federal law. It also imposes a three-year obligation to report additional credible evidence or allegations of criminal conduct.

Elimination of fines and monitors for qualifying companies

No criminal fines or forfeiture will be required, provided the company makes full restitution. This is a significant departure from other DOJ programs that require disgorgement or forfeiture even in declination scenarios. However, other regulators, such as the SEC, may still require disgorgement. In addition, the program eliminates any requirement for a corporate compliance monitor, reducing operational burden and cost. The move away from monitors is consistent with DOJ’s overall approach to corporate resolutions in this administration.

Aggravating circumstances and consequences of non-disclosure

The Program identifies certain disqualifying aggravating circumstances, including conduct with a nexus to terrorism, sanctions evasion, foreign corruption, trafficking, international drug cartels, slavery, forced labor, or physical violence. Other considerations—such as the seriousness or pervasiveness of the misconduct, harm caused, prior criminal adjudications, or involvement of senior leadership—are not automatically disqualifying under the Program.

For companies that do not self-report, SDNY indicated that it will apply a presumption against declination and that appropriate resolutions may include a guilty plea, a deferred prosecution agreement with monetary penalties, or a non-prosecution agreement accompanied by a statement of facts and penalties.

Relationship to DOJ Corporate Enforcement Policies

The Program operates alongside DOJ’s CEP and other DOJ component-specific frameworks. SDNY has stated that the Program is “consistent with” the CEP, and both share core principles. Under each framework, companies that voluntarily self-disclose, fully cooperate, remediate, and lack aggravating circumstances may receive a declination. That said, companies should be aware of meaningful differences between the two frameworks.

The most notable difference is the SDNY Program's subject-matter focus. Unlike the CEP—which encompasses the full range of Criminal Division matters including FCPA enforcement—the SDNY Program is limited to fraud and financial misconduct affecting market integrity, such as securities fraud, commodities fraud, and digital asset fraud.

The frameworks also diverge in their treatment of aggravating circumstances. Under the CEP, factors such as the gravity of the misconduct, the extent of harm caused, recidivism, or the involvement of executive leadership may preclude a declination. The SDNY Program takes a more permissive approach. These factors do not automatically disqualify a company unless the underlying conduct involves specifically enumerated categories such as terrorism, sanctions evasion, foreign corruption, or trafficking.

Perhaps most significantly for companies weighing self-disclosure, the SDNY Program commits to a defined timeline. Qualifying disclosures can expect a conditional declination letter within two to three weeks, offering a degree of speed and predictability not currently specified within the CEP.

While the Program reflects broader efforts to increase predictability around corporate self-disclosure, it does not bind other DOJ components, state authorities, or foreign regulators that may have overlapping jurisdiction. In December 2025, Deputy Attorney General Todd Blanche announced that DOJ expects to issue a department-wide corporate enforcement policy intended to promote consistency across all components.

It remains to be seen how that forthcoming policy will affect the SDNY Program. In the interim, however, companies should be mindful that the new incentives created by the Program could drive competitors to report their own misconduct early, in turn prompting prosecutors to pursue a broader investigation into potential misconduct across a sector.

Practical Considerations

The Program offers a quicker outcome than has historically been available under other voluntary disclosure regimes. However, eligibility depends on prompt, substantive disclosure and the ability to satisfy ongoing cooperation and remediation commitments.

Companies subject to SDNY’s jurisdiction (and particularly financial institutions and other market participants) should consider:

• Whether they would realistically be able to gather sufficient facts quickly enough to make a disclosure decision before learning of a government investigation. The Program requires disclosure at an early stage, often before a full internal investigation is complete. Companies should therefore consider updating and streamlining their internal investigation protocols and processes.
• Whether the conduct at issue could draw interest from other DOJ components or regulators besides SDNY. The Program applies only to SDNY and only to specified categories of fraud. Parallel exposure to the Criminal Division, the SEC, state authorities, or foreign or other domestic regulators may affect timing, coordination, and overall resolution strategy.
• How the required cooperation commitments would operate in practice. The Program contemplates identifying responsible individuals, preserving and producing documents across communication platforms, and supporting the government’s investigation over time. Those commitments may have implications for employees, data retention practices, and internal communications.
• What full restitution would entail in the specific matter. In cases involving broader investor or market harm, determining who qualifies as a victim and calculating losses may be complex and financially material.

As with other voluntary self-disclosure frameworks, decisions under the Program will require a fact-specific assessment of legal risk, timing, jurisdictional considerations, and the company’s remediation intentions. The announcement reinforces the importance of effective compliance systems, prompt escalation and investigation mechanisms, and board-level oversight capable of supporting informed and timely disclosure determinations.