Summary
On February 24, 2026, the U.S. Attorney’s Office for the Southern District of New York announced a new voluntary corporate self-disclosure program covering fraud and financial misconduct affecting market integrity. The program is designed to encourage early self-disclosure of criminal conduct, and provides eligible self-reporting companies with a “clear, agreed-upon path to a declination.” Specifically, the program: (i) provides qualifying companies a conditional declination letter within two to three weeks of self-reporting; (ii) waives all criminal fines and forfeiture obligations provided the company makes “reasonable best efforts” to provide prompt and full restitution to all injured parties; and (iii) eliminates any requirement that a company employ or be supervised by a monitor. The program also establishes clear consequences for non-disclosure. If a company does not self-disclose and SDNY determines that a company’s directors, officers, or employees are criminally liable, the program establishes a presumption that an appropriate resolution will take the form of a guilty plea, a deferred prosecution agreement, or a non-prosecution agreement with a statement of facts. The program is designed, in U.S. Attorney Jay Clayton’s words, 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.”
Material Changes and Key Features of the Program
The program builds on SDNY’s longstanding practice of weighing voluntary disclosures and cooperation favorably in its charging decisions, while providing companies with a greater degree of certainty and specificity as to the outcome than any prior DOJ corporate enforcement policy to date outside of the antitrust context.
Eligible Conduct.
Eligible conduct includes: (a) fraud by a company or corporate entity, or an employee, officer, director, or agent thereof; (b) fraud in connection with a securities, commodities, or digital asset offering, or the trading or brokering thereof; (c) false statements or fraud upon an auditor or federal regulator of financial markets; or (d) other willful violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Exchange Act, the Investment Advisers Act of 1940, and the Investment Company Act of 1940 that “undermine the integrity of financial markets or harm customers, competitors, or market participants.” The program defines “fraud” expansively to include false statements, forgery, embezzlement, misappropriation, insider trading, spoofing, and market manipulation. The program is expressly limited to fraud and financial misconduct affecting market integrity; it is unclear whether the 2023 U.S. Attorney’s Office Voluntary Self-Disclosure Policy (“VSD Policy”), which contains no subject-matter limitation and applies to all U.S. Attorney’s Offices, remains in effect for conduct falling outside the new program’s scope.
Timeliness and Voluntariness.
The program requires prompt disclosure to SDNY before receiving a grand jury subpoena or document request from any law enforcement agency or regulator, and before the company learns of a government investigation. The existence of prior whistleblower submissions (including to the government), press reporting that does not mention a government investigation, and self-reports to other agencies will not disqualify a company from qualifying for the self-disclosure program. Strategic or self-serving delay, however, may disqualify a company, even where its own investigation is not complete. The disclosure must be “substantive and specific, including all known facts about the nature of the misconduct, the individuals involved, and any affected parties,” and updated promptly as new information emerges.
Full Cooperation.
Required cooperation includes timely disclosure of all relevant non-privileged information; attribution of facts to specific individuals where feasible; production of all relevant documents wherever located, with affirmative obligations to address data privacy laws and blocking statutes; preservation of records and communications across all platforms including ephemeral messaging applications; and, for three years following the final declination, reporting to SDNY all credible evidence or allegations of criminal conduct by the company or its employees.
Remediation and Restitution.
The program requires a commitment to remediate harm before receiving a conditional declination letter, and reasonable remediation before a final declination. Remediation may include compliance program changes and disciplinary action against those involved in the misconduct. Restitution obligations extend to all parties qualifying as victims under federal law, with credit given for amounts paid through regulatory resolutions with the SEC or CFTC.
Aggravating Circumstances.
Any nexus to terrorism, sanctions evasion, foreign corruption, sex trafficking, human trafficking, international drug cartels, slavery, forced labor, or physical violence will render a company ineligible. But the program does not otherwise treat the seriousness of the offense, the pervasiveness of the misconduct, the severity of harm, prior criminal adjudications, or senior leadership involvement as aggravating or disqualifying.
Terms and Timing of the Declination.
Qualifying companies can expect a conditional declination letter within two to three weeks of self-reporting. Upon completing all cooperation and remediation obligations, the company will receive a final notice of declination. Under this policy, SDNY will not seek or require payment of any criminal fine or forfeiture, provided the company makes “reasonable best efforts” to provide prompt and full restitution to all injured parties, and will not require the company to employ, or be supervised by, a monitor.
Consequences for Non-Reporters.
For companies that do not self-report, the program establishes a presumption in favor of a guilty plea, deferred prosecution agreement, or non-prosecution agreement with a monetary penalty, together with “a strong presumption against the issuance of a declination.”
Simultaneously with the program, SDNY published a model conditional declination letter governing the relationship between SDNY and a self-reporting company from disclosure through final declination. The letter specifies conditions for revocation, tolling of statutes of limitations, and pre-transaction notice requirements, including that any sale, merger, or material change in corporate form must bind the purchaser or successor to the letter’s obligations, with non-compliant transactions rendered null and void.
Implications
The program raises several considerations that companies and their counsel should think through before any disclosure decision is made. The two-to-three-week timeline for a conditional declination gives a company and its shareholders visibility into the likely outcome of SDNY’s investigation earlier than has generally been possible in federal criminal matters outside the antitrust context. The disclosure must be substantive and specific from the outset and updated as new information emerges. A premature or incomplete disclosure risks losing eligibility before a conditional letter is ever issued, leaving the company in a worse position than if it had not approached SDNY at all.
The declination covers only the company and extends no protection to any officer, director, or employee. Clayton has stated that the program is designed to allow SDNY to focus resources on prosecuting individuals, and has noted that some prosecutions of executives and employees are based on information obtained through corporate self-disclosures. The cooperation obligations under the program are structured to facilitate that outcome, and a decision to self-report is therefore a decision to provide SDNY with the evidentiary foundation it needs to pursue the company’s own people.
The program should also be read against the broader federal enforcement landscape. The prior U.S. Attorney’s Office VSD Policy left non-prosecution agreements, deferred prosecution agreements, and fines as possibilities in final resolutions even for companies that voluntarily self-disclosed, fully cooperated, and timely remediated. The current program eliminates those possibilities for qualifying companies and expressly states that it is consistent with the Department of Justice’s Corporate Enforcement and Voluntary Self-Disclosure Policy. The presumptions and consequences for non-disclosure continue to vary across DOJ components, though Deputy Attorney General Todd Blanche announced in December 2025 that DOJ expects to issue a department-wide corporate enforcement policy intended to promote consistency across all components, which may affect the relationship between the new SDNY program and the broader DOJ framework when issued.
Finally, the program frames voluntary self-disclosure as a matter of corporate governance as much as law enforcement, stating that a failure to self-report risks placing individual interests over fiduciary obligations, the interests of victims, and the public interest generally. That framing provides a basis for measuring board and management conduct against the program’s standard independent of any criminal proceeding.