“Fake News” or Actual Clarity: U.S. Attorney Jay Clayton Addresses DOJ and SDNY Corporate Enforcement Policies

The first few months of 2026 have brought new and important developments to the federal government’s approach to corporate criminal enforcement and voluntary self-disclosure. First, the U.S. Attorney’s Office for the Southern District of New York (SDNY) unveiled a revised corporate enforcement policy in February; then, the Department of Justice (DOJ) followed shortly thereafter with its own department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP). 

Both the SDNY policy and the DOJ CEP reflect a shared governmental objective: focusing on prosecuting individual wrongdoers rather than corporations that invest in effective compliance programs, voluntarily self-report potential misconduct, and cooperate meaningfully with law enforcement.

What remains unclear is whether the DOJ policy supersedes the SDNY’s or whether they will operate alongside one another. As a general matter, U.S. Attorney’s Offices, as part of the DOJ, are subject to the new CEP.

Recent developments have only deepened this uncertainty. On April 14, 2026, U.S. Attorney for the SDNY Jay Clayton publicly stated at a New York University conference that reports of the DOJ-wide policy superseding SDNY's own declination policy are “fake news,” according to attendees of the event.

Clayton reportedly emphasized that SDNY's program remains active and continues to accept submissions. These remarks appear to conflict with a DOJ press release from last month, which stated that the CEP supersedes “all component-specific or U.S. Attorney's Office-specific corporate enforcement policies currently in effect.” An SDNY spokesperson characterized Clayton's remarks as “tongue-in-cheek,” but the apparent disconnect underscores the need for companies to carefully monitor how these policies are applied in practice.

This alert summarizes each policy and addresses the practical implications for companies navigating this rapidly evolving enforcement landscape. It also addresses recent reports that U.S. Attorney Clayton has publicly pushed back on the notion that the DOJ-wide policy supersedes SDNY's own declination policy.

The SDNY Policy: A New Blueprint for Voluntary Self-Disclosure

On February 24, 2026, Clayton announced a revised corporate enforcement and voluntary self-disclosure policy for the SDNY. The policy represented a significant update to the SDNY’s 2023 policy, offering companies a faster and more certain pathway to avoid prosecution.

The centerpiece of the new SDNY policy is the conditional declination agreement. Under the policy, once a corporation self-discloses criminal conduct, the SDNY will promptly provide a conditional declination agreement (potentially within two to three weeks) provided the corporation commits to cooperating with the investigation, remediating harms, and making victims whole. Companies can publish the early declination letter to signal to the market that they remain in good standing.

The revised policy differs from its predecessor in two important respects.

• First, under the 2023 policy, a corporation only qualified for self-disclosure benefits if it disclosed misconduct before it was publicly reported or known to the government. The revised policy relaxes this requirement: corporations that self-disclose wrongdoing about which the government is already investigating may still benefit, provided the company believed the misconduct was not known to the government.
• Second, under the prior policy, even corporations that voluntarily self-disclosed, fully cooperated, and remediated harm had no assurance they would avoid prosecution, because the SDNY retained discretion to bring charges. The revised policy now guarantees a declination for corporations that meet these conditions, providing the certainty that companies and their boards have been demanding and which they require when making the decision of whether to self-report.
  
  

The DOJ Policy: Attempting Uniformity in Corporate Enforcement

Shortly after the SDNY announced its revised policy, in March 2026, the DOJ unveiled the CEP, a first-of-its-kind department-wide corporate enforcement policy for criminal matters.    

The CEP comes on the heels of two prior DOJ directives. In September 2022, the DOJ issued guidance directing all DOJ components to evaluate their policies regarding corporate voluntary self-disclosure and, if necessary, issue such a policy. In May 2025, the DOJ’s Criminal Division issued its own corporate enforcement policy. Now, the CEP applies a single, uniform policy across the DOJ (except for antitrust matters, which remain governed by the Antitrust Division’s Corporate Leniency Policy), signaling its intent to take a standardized and uniform approach to corporate enforcement.

The CEP aims to “incentivize responsible corporate behavior” by “encouraging companies to invest in effective compliance programs, voluntarily self-report potential misconduct, meaningfully cooperate with law enforcement, and make good-faith efforts to rectify wrongdoing.”¹ The policy seeks to maximize predictability and transparency, offering clear benefits to companies looking for a declination or leniency.

The CEP establishes three distinct pathways for companies to avoid or reduce their exposure for corporate criminal misconduct:

Pathway 1: Declinations

Under the first and most favorable pathway of voluntary self-disclosure, the DOJ will decline to prosecute a company for criminal conduct if it meets the following four requirements: (1) voluntary self-disclosure of misconduct to the appropriate DOJ component; (2) full cooperation with the investigation; (3) timely and appropriate remediation of the conduct; and (4) the absence of aggravating circumstances such as egregious misconduct or criminal recidivism within the past five years. CEP declinations will be made public, and companies must pay all disgorgement, forfeiture, restitution, and victim compensation.

The disclosure must not have been known to the DOJ or be the subject of imminent investigation. Full cooperation requires companies to promptly and accurately disclose all relevant facts and nonprivileged evidence, and to preserve relevant materials. Companies must also demonstrate remediation by such measures as, for example, analyzing the causes of misconduct, strengthening compliance programs, and disciplining responsible employees.

Pathway 2: ‘Near Miss’ Cases

The second pathway, referred to as "near miss" self-disclosures, applies to companies that fully cooperate with the DOJ and remediate criminal misconduct but either make a good-faith disclosure that falls short of the technical requirements under the first pathway of voluntary self-disclosure or have aggravating factors warranting resolution. Under this approach, the DOJ will provide a non-prosecution agreement with a potential term length of fewer than three years, will not insist on an independent compliance monitor, and will reduce any fine by between 50 percent and 75 percent of the low end of the U.S. sentencing guidelines.

Pathway 3: Prosecutorial Discretion

The third pathway is left to prosecutorial discretion. If a company is not eligible for either of the first two pathways, the CEP gives prosecutors "discretion to determine the appropriate resolution[,] including form, term length, compliance obligations, and monetary penalty." In this scenario, if a company fully cooperates and remediates, the DOJ may reduce any fine by up to 50 percent of the low end of the U.S. sentencing guidelines.

The CEP's uniformity across all of DOJ means that companies can now evaluate cooperation against one set of rules. That said, the decision to self-disclose remains complicated, requiring companies to strategically balance speed, preservation of legal defenses, the risk of learning new facts after disclosure, and potential reputational harm.

Differences between SDNY Policy and CEP

It is not clear whether the CEP supersedes the SDNY Policy. The recent CEP press release suggests that it does, but U.S. Attorney Clayton’s comments this week suggest otherwise. Only time will tell which version will control within the SDNY.

The reason that it is important for companies is that there are notable differences between the SDNY policy and the CEP. The SDNY policy is focused on financial fraud specifically, while the CEP covers all crimes except antitrust matters. The SDNY policy is also more generous in defining what constitutes a “voluntary” disclosure: companies can receive credit so long as they have not yet received a grand jury subpoena or document request from a law enforcement or regulatory agency. Under the CEP's Pathway 1, by contrast, companies must disclose misconduct that the government does not already know about. The SDNY's promise of a conditional declination within two to three weeks is also notable and particularly appealing for companies with SEC reporting obligations because of their need to provide certainty to investors. Whether SDNY will continue to offer that expedited timeline under the CEP framework remains an open question.

Key Takeaways

In light of these developments, companies should:

• Investigate promptly. As soon as a company becomes aware of potential misconduct, it should promptly investigate to determine whether self-reporting is in its best interest. While the CEP provides a more uniform framework for evaluating cooperation, the decision to self-disclose remains a complex one.
• Strengthen compliance and incident-response protocols. Companies should assess their internal compliance functions and ensure they have clear reporting mechanisms for whistleblowers.
• Evaluate risk at all stages. Companies should be constantly updating the cost-benefit analyses about self-reporting as they learn more facts from their investigations.
• Stay Updated. Companies should stay up-to-date with any developments that may help answer the open questions that remain after the issuance of the CEP, particularly its interplay with the SDNY policy.
  
  

For specific guidance on leveraging the declination possibilities set forth under the SDNY policy or the CEP, please contact the Lowenstein Sandler White Collar Defense group.

¹ Department of Justice, Corporate Enforcement and Voluntary Self-Disclosure Policy (updated March 10, 2026), available at https://www.justice.gov/dag/media/1430731/dl?inline.