The 2024 American Bar Association (ABA) White Collar Crime conference recently wrapped up in San Francisco, and with it, came insights into government enforcement priorities for the year ahead. Themes that emerged across the presentations included the promise and peril of artificial intelligence (AI), a continued emphasis on individual accountability for corporate wrongdoing, consequences for corporate recidivists, the perennial importance of voluntary self-disclosure by corporations, and new rewards for whistleblowers.
Attorney General Garland addresses AI, election threats, and individual accountability
In a fireside chat with former Department of Justice (DOJ) Criminal Division Assistant Attorney General Kenneth Polite, Attorney General Merrick Garland discussed both the great promise and serious risks accompanying the use of AI. Among the attendant risks have been the acceleration of cyberattacks on U.S.-based entities, the leveraging of AI to increase political polarization, and AI-aided attacks on the electoral system. Attorney General Garland announced that earlier that day, an indictment had been unsealed in the Northern District of California against a Chinese national alleged to have stolen AI-related trade secrets and intellectual property from Google. Attorney General Garland warned that the DOJ will not tolerate the theft of intellectual property related to AI, noting that the Department recently hired its first Chief Artificial Intelligence Officer.
The Attorney General also expressed great concern about the heightened level and speed of threats made to those who work in public spaces, including judges, prosecutors, police officers, and both paid and volunteer election workers. Reflecting on the recent 59th anniversary of Bloody Sunday, Attorney General Garland emphasized that the right to vote is a fundamental element of our democracy and vowed that the DOJ will aggressively pursue those who threaten not just voters but those who facilitate our fair elections.
A primary DOJ focus remains the pursuit of individual accountability for corporate misconduct, according to Attorney General Garland. The acts of corporations are comprised of the acts of individuals, and the greatest deterrence to white-collar criminal conduct remains the fear of individual prosecutions. The Attorney General stressed that, when the public sees that the powerful and the powerless are governed by the same set of rules, respect for the rule of law is augmented.
Deputy Attorney General Lisa Monaco announced new whistleblower pilot program and reiterated existing DOJ priorities
In her keynote address, Deputy Attorney General Lisa O. Monaco announced the launch of a DOJ whistleblower pilot program. The new program is intended to close gaps left by whistleblower programs administered by the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC), and other agencies, which she likened to “a patchwork quilt that doesn’t cover the whole bed.” The DOJ’s program will provide monetary rewards to individuals who submit truthful information to the government that was previously unknown to it, so long as all victims have been compensated, the reporter was uninvolved in the criminal activity, and another agency’s whistleblower program does not apply. Deputy Attorney General Monaco directed attendees to “stay tuned” for further details, noting that the program will officially launch later in 2024.
Deputy Attorney General Monaco devoted a significant portion of her remarks to corporate wrongdoing. Linking the new whistleblower program to the DOJ’s existing focus on voluntary self-disclosures, she made clear that “neither companies nor individuals can afford to sit on evidence of wrongdoing.” Deputy Attorney General Monaco also cautioned that the DOJ will continue to deliver consequences for corporate recidivists. In the DOJ’s view, recidivism demonstrates that the message was not received, so penalties for repeat offenders frequently need to be ratcheted up. Deputy Attorney General Monaco echoed the Attorney General’s statement that the DOJ’s priority continues to be securing convictions of individuals responsible for corporate misconduct. She offered as examples the recent successful prosecutions of the CEOs of Binance and FTX, two executives from Theranos, two managing directors of Goldman Sachs, and dozens of other executives across a broad swath of industries.
Deputy Attorney General Monaco also referenced her recent speech in Oxford, England, regarding AI’s perils and promises and expressed concern about criminals “supercharging” their crimes through the use of AI. She warned that federal prosecutors will seek stiffer penalties for defendants who deliberately misuse AI in the course of their crimes. The DOJ also expects companies to manage AI-related risks as part of their overall compliance efforts.
SEC, CFTC, and DOJ enforcers discuss enforcement priorities
Other conference highlights included an enforcement panel discussion in which SEC, CFTC, and DOJ leaders discussed recent enforcement actions and their respective priorities. Topics included corporate recidivism, cryptocurrency enforcement, voluntary self-disclosure, and AI. Of particular note were comments by CFTC Division of Enforcement Director Ian McGinley concerning the CFTC’s focus on crypto-related crime, as evidenced by the fact that nearly half of the CFTC’s docket is comprised of crypto cases. Also of note were comments by the SEC’s Division of Enforcement Director Gurbir Grewal related to five key areas of risk relating to AI. Unsurprisingly, the panelists endorsed the familiar governmental directive regarding voluntary self-disclosure: “Call us before we call you.”
