On April 3, the Department of Justice and the SEC announced simultaneous criminal and civil enforcement actions against a Long Island investment adviser in connection with a $160 million fraud scheme — the same day the White House requested $30 million to fund a new National Fraud Division at DOJ. The message was deliberate: federal fraud enforcement is accelerating, and it runs on two tracks at once.
South Florida companies and executives need to pay attention. The Southern District of Florida is one of the most active federal enforcement jurisdictions in the country. Securities fraud, investment adviser fraud, healthcare fraud, and financial crimes prosecutions flow through this district at a rate that makes it a national bellwether for how parallel proceedings — simultaneous criminal and civil actions arising from the same conduct — actually work in practice. When the government here moves, it typically moves on both tracks simultaneously.
That dynamic has become significantly more complex since March 10, when the DOJ released its first-ever department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy. The new policy has received extensive national commentary, almost all of it focused on the criminal enforcement calculus. What has received far less attention is what the policy means for companies already facing, or likely to face, parallel civil exposure — which in South Florida is most of them.
What the New Policy Offers
The policy’s promise is real. Companies that voluntarily self-disclose misconduct to a DOJ criminal component, fully cooperate with the resulting investigation, and timely remediate can earn a declination from criminal prosecution. For a company facing a serious federal criminal exposure, that outcome is transformative.
The policy creates a structured three-tier framework. Full self-disclosure with cooperation and remediation earns a presumptive declination. “Near miss” cases — where the disclosure doesn’t fully qualify but the company cooperated and remediated — can still earn penalty reductions of 50 to 75 percent off the Sentencing Guidelines range. Companies that don’t self-disclose retain some cooperation credit but face the full range of criminal resolution options.
As a former AUSA in this district, I can say plainly: this is a more predictable and more generous framework than what existed before. The DOJ has done something useful by creating uniform incentives across all its components and all U.S. Attorney’s Offices. Companies that discover misconduct now have a clearer roadmap for the criminal side of their problem.
The civil side of their problem is another matter.
The Gap the Policy Doesn’t Address
The new CEP explicitly applies only to DOJ’s criminal components. It does not govern the SEC, the CFTC, DOJ’s Civil Division, state attorneys general, or private plaintiffs. A criminal resolution under the CEP — even a declination — does not preclude civil liability, securities fraud class actions, shareholder derivative suits, or SEC enforcement proceedings. The policy acknowledges this implicitly by noting that disclosures made only to civil enforcement agencies “generally do not qualify” for CEP credit. It offers no guidance on what to do when a company must manage both at once.
In the Southern District of Florida, that gap matters more than almost anywhere else. This district has historically been among the leaders in SEC enforcement referrals and parallel criminal prosecutions. The same conduct that triggers a DOJ criminal investigation in Miami or Fort Lauderdale will typically attract SEC interest, and often private plaintiff attention shortly thereafter. The company that follows the CEP’s guidance carefully — disclosing comprehensively, cooperating proactively, remediating thoroughly — will have created a detailed record of its misconduct that plaintiffs’ counsel can use in the civil arena.
Three Practical Realities for South Florida Companies
Voluntary disclosure creates a civil record. The CEP requires that companies disclose “all relevant non-privileged facts” and attribute those facts to specific sources. A comprehensive disclosure to DOJ’s criminal component — the kind that earns cooperation credit — describes the scope of misconduct, identifies responsible individuals, and establishes a timeline of events. Under the CEP, declinations are made public. The disclosure itself may surface through regulatory coordination, parallel SEC subpoenas, or civil discovery. What the company disclosed to earn a declination may become the roadmap for the class action that follows.
Remediation generates discoverable documents. To satisfy the CEP, companies must conduct a root-cause analysis, discipline responsible employees, and implement compliance improvements. Each step generates documents. A root-cause analysis that candidly identifies systemic failures — which is what the government expects — is also the document a securities fraud plaintiff will seek in discovery. Disciplinary records that name responsible individuals and describe their conduct are admissible in civil proceedings. The thoroughness that earns DOJ credit creates civil exposure that can exceed the criminal penalty avoided.
The 120-day clock competes with civil litigation strategy. The CEP permits a company to earn a declination even after a whistleblower has submitted to DOJ, as long as the company self-reports within 120 days of receiving an internal whistleblower report. That deadline was designed for the criminal enforcement context. It does not account for the civil discovery timeline, the sequencing of an SEC investigation, or the strategic considerations that bear on when and how a company should make statements about its own misconduct. A company that discloses under pressure of the criminal clock before it understands its full civil exposure has made a forced decision, not a strategic one.