Introduction

This week, the U.S. Attorney’s Office for the Southern District of New York unveiled a new Corporate Enforcement and Voluntary Self‑Disclosure Program for Financial Crimes.¹

SDNY’s Program offers declination to companies that promptly self‑report financial‑related offenses. The new policy also provides other guarantees: it removes subjective disqualifiers (such as offense seriousness or pervasiveness), limits financial consequences to full restitution, and provides conditional declination letters within two to three weeks of self-disclosure, with final declinations following satisfactory completion of cooperation and remediation. By contrast, companies that choose not to self‑report will face a strong presumption against a declination.

The Program heightens the stakes of early decision‑making for companies with potential criminal exposure in SDNY. It places a premium on rapid detection and assessment of misconduct, making robust, well‑resourced compliance functions more essential than ever.

Core Components and Benefits of the Program

SDNY adopted the Program as an update to the Voluntary Self‑Disclosure Policy (VSD Policy) used by all U.S. Attorney’s Offices since 2023,² but it establishes a distinctly clearer path to declination.

The Program covers misconduct involving fraud and other market‑integrity offenses, such as securities fraud, commodities and digital‑asset misconduct, false statements to auditors or regulators, and willful violations of core federal financial regulatory statutes. To qualify, companies must promptly disclose to SDNY after discovery of misconduct and before learning of any government investigation.

Cooperation requirements are extensive but familiar; companies must provide all relevant non‑privileged information, identify culpable individuals and attribute facts to them where feasible, produce documents, and use all efforts to make foreign‑located materials available, preserve all records (including ephemeral messaging, like Slack chats), coordinate investigative steps with SDNY, and use best efforts to make witnesses available. Participating companies must also commit to reporting credible allegations of criminal conduct to SDNY for three years.

The SDNY Program does not apply to certain categories of offenses—specifically, offenses with any nexus to terrorism, sanctions evasion, foreign corruption, forced labor, trafficking offenses, and money laundering. Importantly, SDNY does not treat offense seriousness, pervasiveness, severity of harm, criminal history, or senior‑leadership involvement as disqualifying, removing several subjective barriers from the analysis that remain in the VSD Policies employed by other U.S. Attorney’s Offices.

Eligible companies gain a fast, predictable resolution; SDNY will decline prosecution of a company (including its affiliates) for the self‑reported conduct, require only full restitution, and impose no monitorship. Conditional declination letters³ are expected to be issued within two to three weeks of making a self-report, with final declinations following full cooperation, remediation, and restitution. The declination provides no protection to individuals and binds only SDNY, though SDNY will inform other relevant authorities of the company’s self‑reporting.

Interplay with the Criminal Division’s Corporate Self-Disclosure Policy

SDNY’s new Program operates alongside the DOJ Criminal Division’s Corporate Enforcement and Voluntary Self‑Disclosure Policy (the CEP), updated in May 2025.⁴ While aligned in their shared goal of offering companies greater certainty around self‑reporting, it remains unclear how the two frameworks will interact, or compete, as companies decide whether, when, and where to disclose.

Key differences exist. SDNY’s Program covers a narrower set of financial‑misconduct offenses, while the CEP applies to all Criminal Division corporate matters. SDNY limits outcomes to restitution only, with no potential financial penalties, whereas the CEP may require disgorgement or forfeiture even in a declination. SDNY also removes several subjective aggravators, including seriousness, pervasiveness, and senior‑leadership involvement, that can muddy the water and disqualify a company under the CEP. And SDNY employs a simpler voluntariness standard: disclosure before SDNY learns of the misconduct, with carve‑outs for whistleblower and certain press reporting, compared to the CEP’s more uncertain “no imminent threat of disclosure or government investigation” requirement.

Practical Takeaways

Double down on early detection and internal reporting.

SDNY and DOJ more broadly are plainly steering companies toward self‑reporting, both through clearer declination pathways and through well-publicized whistleblower programs that encourage insiders and other market participants to report directly to the Government. Companies should ensure their compliance programs enable reliable internal reporting and rapid escalation so they can evaluate issues before prosecutors (or whistleblowers).

Speed cuts both ways.

SDNY promises a conditional declination within two to three weeks of a qualifying disclosure, but companies likewise need to move quickly to report to avoid squandering eligibility. Companies will need to balance the desire for certainty with a comprehensive understanding of the operative facts.

Consider the stakes of not reporting.

With clearer benefits come clearer consequences: SDNY signals that companies that choose not to self‑report or make an attempt to do so inherit a strong presumption against declination. U.S. Attorney Clayton emphasized that “companies that choose not to cooperate proactively and are found to have engaged in criminal conduct[] will face significant corporate consequences.”⁵ While the decision whether to self-report remains a delicate balancing of all available information, the downside of not doing so may carry additional weight in the SDNY.

Choose your forum carefully.

Because SDNY’s Program and the Criminal Division’s CEP both encompass financial‑crime matters, companies with potential SDNY exposure may have added incentives to approach SDNY first. Notably, the CEP allows a company to qualify even if it disclosed in good faith to another DOJ component (e.g., SDNY) where the Criminal Division later participates, an option that may be attractive when conduct sits squarely within SDNY’s remit, and SDNY’s conditional declination pathway with a restitution‑only and no‑monitor outcome may be available.