Wall Street’s top prosecutors want lawbreaking companies to hand themselves in, offering behind-closed-door deals that let them avoid being charged, fined or having full details of their fraud made public.
The US Attorney’s Office for the Southern District of New York (SDNY), which secured huge fines and guilty pleas from companies such as Drexel Burnham Lambert and Steve Cohen’s SAC Capital, has been meeting big law firms and corporate advisers in recent weeks to promote its softer approach to white-collar crime.
The lenient new deals are available even in cases where alleged fraud was pervasive, caused severe harm, involved senior leaders and had already been reported in the press or by a whistleblower.
Prosecutors might charge individuals, but they would not charge companies even if the wrongdoing was worse than originally admitted. They would also not publish details of the deals.
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So-called voluntary self-disclosure policies have been available in the past but the new SDNY version, which only applies to fraud, is significantly more generous to companies.
The policy, and the meetings to promote it to criminal defence lawyers and others, are a sign of how the SDNY office has taken a more business-friendly approach under the leadership of former Apollo Global Management chair Jay Clayton. It aims to protect companies’ shareholders while making it easier to convict individuals.
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The shift comes as overall US white-collar prosecutions have fallen to their lowest level in at least four decades. The US department of justice (DoJ) has lost more than a quarter of its lawyers since January 2025 and US president Donald Trump has pardoned large numbers of white-collar criminals.
“There’s more carrot here, but there’s also a lot less stick,” a former federal prosecutor said, referring to the retreat in white-collar enforcement and fall in DoJ staffing. For companies, they said, the decision to disclose fraud “really boils down to, what are my odds of getting caught?”.
Clayton said the new system was designed to enable the office to uncover more fraud, more quickly. “That’s what the American people want from their companies and their justice department,” he said.
“If you don’t report and we find it, we’re going to kill you,” Clayton told a conference on Wednesday. “That’s the deal ... If you know [about fraud], and you don’t tell us, that’s bad.”
The overhauled policy has sown confusion among criminal defence lawyers because the DoJ has publicly said that its own, less generous, policy supersedes those of other offices. The SDNY office is a unit of the DoJ, though it has tended to act independently.
Clayton said the justice department policy allowed local offices to exercise their own discretion. The DoJ did not respond to a request for comment.
Clayton said at Wednesday’s conference that it was “fake news” to say the DoJ policy superseded his. He said there were “big problems” with the SDNY’s previous approach because companies could not “really trust” that if they handed themselves in they would not be prosecuted – whereas the new model provided “what the shareholders want”.
Companies that use the SDNY’s version can receive a letter from the office within two to three weeks saying it does not plan to prosecute them, a move that Clayton’s office said would give “the company, its management and its shareholders clarity as to the outcome of the investigation at the outset”.
They could also avoid “any form of financial penalty in the form of a criminal fine or forfeiture” as long as they make “reasonable best efforts” to reimburse victims, the office said in a document outlining the plan. The deals can be used even if it is not a first offence.
Companies that use the SDNY policy must tell the office about any “credible evidence or allegations” of breaches of US laws by it or its staff for three years after the deal. Some defence lawyers said this measure could deter companies from using it. The deals are not available if a company is already aware of an open SDNY investigation into the conduct.
The DoJ’s separate, less lenient, self-reporting policy says such deals will be made public. But the SDNY does not plan to publish its deals, though their existence would become known if an individual was prosecuted or the company itself disclosed it, which in some cases regulators might require.
The SDNY deals do not require the publication of a “statement of fact”, a document used in non-prosecution agreements which provides a detailed account of the wrongdoing.
Clayton said some companies had already come forward and some “wrongdoers” had been charged. He did not name the companies or share any details of their fraud, however.
“You will see results of the policy very soon,” Clayton said at Wednesday’s conference. – Copyright The Financial Times Limited 2026
