A drop in white-collar crime prosecutions and corporate fines during the Trump administration has prompted a warning from a leading law firm.
New York-based Wachtell, Lipton, Rosen & Katz issued a memo to its clients noting the “significant” decrease in both the number of cases and the scale of penalties over the last two years.
The lawyers advised businesses not to relax their approach to laws and regulations, adding: “Our experience suggests that succumbing to such temptation would be a mistake.”
“White-collar prosecutions since President Trump assumed office generally have been lower than in previous administrations,” researchers said.
Corporate fines from criminal prosecutions also plunged by more than 90 per cent, according to a study comparing the last year of the Obama administration and the first year under President Trump.
The “lighter touch” approach towards the banking industry is further demonstrated by a large drop in the number of cases pursued by the Securities and Exchange Commission, according to analysis by The New York Times.
“In such an environment, companies might be tempted to think that having an effective compliance programme is less urgent and less important than the past,” Wachtell, Lipton, Rosen & Katz told its clients on Wednesday.
“In fact, now is arguably the best time for corporations to continue investing in their compliance programmes to ensure they have in place an effective and comprehensive set of compliance policies, procedures and internal controls.”
Extraordinary memo from Wachtell tonight conceding that white collar enforcement in Trump era is way down pic.twitter.com/2ljocRQOlr— Sujeet Indap (@sindap)July 18, 2019
The Department of Justice has previously tried to deny suggestions that white-collar prosecutions are decreasing, claiming a three per cent rise during the year to September 2018, with more than 6,500 suspects charged nationwide.
“President Donald Trump is a law-and-order president—and this is a law-and-order administration,” said attorney general Jeff Sessions, less than three weeks before he resigned at Mr Trump’s request.