SDNY Announces Updated Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes

On February 24, 2026, the U.S. Attorney’s Office for the Southern District of New York (“SDNY”) announced SDNY’s updated Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes (the “Program”).[1] The Program is intended to incentivize companies to disclose covered financial misconduct promptly and to offer these companies “a clear, agreed-upon path to a Declination” of prosecution. While the Program seeks to offer companies tangible benefits for self-reporting, it also creates risks and raises questions about how it will interact with the existing self-disclosure framework of the Department of Justice (“DOJ”).

Overview of the Program

The Program applies to various types of financial crimes, including fraud by a company or its employees; fraud involving securities, commodities, or digital assets; false statements or fraud involving an auditor or federal financial regulator; and other willful violations of the federal securities laws.[2] Under the Program, an eligible company receives a Declination if that company promptly and voluntarily discloses covered conduct, remediates any harm caused, and cooperates fully with SDNY in its investigation.   

Under the Program, Declinations proceed in two steps:

• Conditional Declination. After receiving an “initial self-report” from a company, SDNY will issue a letter of “Conditional Declination.” The Program states that SDNY will issue “a Conditional Declination letter within two to three weeks” after a company makes an initial self-report.[3] The letter would establish the “Company’s [e]ligibility” for the Program conditioned on:
  • Prompt disclosure. After “discovering the illegal activity,” the company “promptly” reported it. For voluntary disclosure to qualify, there must have been no “preexisting obligation to disclose the conduct to [DOJ],” and the company must have come forward “prior to knowing of a government investigation” and “prior to receiving a grand jury subpoena or document request concerning the illegal activity from a U.S. law enforcement agency, [] regulator,” or a state attorney general.
  • No aggravating circumstances. There are no “aggravating circumstances” that would make the company ineligible for the Program. These include “conduct involving or having a nexus to terrorism, sanctions evasion, foreign corruption, sex trafficking, human trafficking and smuggling, international drug cartels, slavery, forced labor, or physical violence.” In other words, financial fraud or other conduct that would otherwise be covered by the Program does not qualify where the fraud or other conduct related to sanctions evasion, foreign corruption or those other enumerated categories of conduct.
• Final Declination. A Conditional Declination will state that, after the company meets its obligations, including “completing remediation,” “making restitution to injured parties” and “providing the required cooperation,” SDNY will issue a Final Declination. Furthermore, SDNY will “not seek or require payment of any financial penalty in the form of a criminal fine or forfeiture” and will “not require the appointment of any monitor,” as part of a Final Declination.[4] Before receiving the Final Declination, the company must complete the following terms of the Conditional Declination:
  • The company must make “remediation efforts,” including “implementing changes to the Company’s compliance program” and “suspending, terminating, or disciplining any employee, officer, director, agent, customer, or investor directly involved in the illegal activity.”
  • The company must “make restitution to all injured parties.” This requirement “extends to any party or class of parties that qualify as a victim and have suffered a loss as defined by federal law relating to restitution.”
  • A company must commit to providing “timely, truthful, continuing, and full cooperation,” which includes: “disclosing all relevant, non-privileged information known” about the illegal activity; “identifying individuals involved” and potential “witnesses”; “sharing the non-privileged factual results of internal investigations” and “all relevant documents” in its possession; using “best efforts” to make employees available for interviews with the DOJ and encourage their truthfulness; “preserving all records and communications”; and “consenting to any and all disclosures to other federal governmental authorities.” The cooperation requirements may extend for a considerable period during the SDNY’s “investigation into the illegal activity” and will continue for an additional three years after the Final Declination.
• If the company does not comply with the requirements of the Conditional Declination and the SDNY determines that there has been a “breach” of the Conditional Declination, SDNY may “revoke” the Declination and “may thereafter initiate a criminal prosecution.” In effect, the Conditional Declination may create a framework similar to a Non-Prosecution Agreement or a Deferred Prosecution Agreement where the prosecution is held in abeyance based on the company continuing to undertake the required measures, including the required cooperation. 

Key Takeaways

Incentives. The Program offers a company potential benefits for self-reporting eligible activity. These benefits include:

• Early action. Companies receive a Conditional Declination within weeks of disclosure and a clear path towards a Final Declination. This approach departs from the Voluntary Self-Disclosure Policy for the U.S. Attorney’s Offices in 2023, which did not include the presumption of a Declination.[5] A Final Declination would avoid a criminal charge and also not include a criminal fine or forfeiture requirement.
• Avoiding a criminal resolution. The Program makes clear that companies that do not self-report are more likely to face a criminal resolution. According to SDNY, failure to report creates a “strong presumption against the issuance of a Declination,” and a presumption for “a [G]uilty [P]lea, [D]eferred [P]rosecution with a monetary penalty, or [N]on-[P]rosecution with a statement of facts and monetary penalty.”[6]

Risks. At the same time, the Program includes conditions that create risks to a company, such as: 

• Uncertain restitution and remediation requirements. A Conditional Declination following a self-disclosure leaves open the type of remedial changes and restitution payments that may be required by SDNY. For example, a company must discipline all “directly involved” persons and pay full restitution to “all injured parties,” but it is SDNY that makes the determination whether the company has met these obligations.
• Open-ended cooperation. There is no clear time limit on a company’s cooperation obligations under a Conditional Declination. Depending on the nature of the investigation, a company entering a Conditional Declination may need to cooperate during the pendency of a years-long investigation. 
• Ongoing reporting requirements. Even after receiving a Final Declination, a company must report any “credible evidence or allegations” of additional criminal conduct for three years. The Program provides no assurances that newly reported activity will qualify for a Declination and thus could expose the company to future liability.
• Parallel enforcement actions. As with other voluntary self-disclosure programs, the Program “cannot bind any state, local, or foreign prosecuting authority, or any other federal authority including regulators,” and there is a risk of other enforcement actions.

Open Questions. Finally, there remain questions about the interaction between the SDNY Program and the existing enforcement policy frameworks issued by other parts of the DOJ, including the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”),[7] and the National Security Division’s Enforcement Policy for Business Organizations (“NSD Policy”).[8] It remains to be seen how SDNY will implement the Program in cases where it intersects or overlaps with other DOJ self-reporting frameworks.  And it remains to be seen whether the new “single” DOJ-wide corporate enforcement policy that the Deputy Attorney General announced in December 2025, will pre-empt and replace the SDNY Program and similar policies and programs that may be adopted by other U.S. Attorney’s Offices.[9]

• SDNY Program v. DOJ CEP. The Program and the CEP differ in two key respects: scope and eligibility. The SDNY Program covers a narrow subset of financial crimes, whereas the CEP extends to a wider range of offenses, including violations of the anti-bribery and money laundering laws. The Program also takes a narrower view of the aggravating factors that can disqualify a company—such as ties to terrorism—while the CEP takes a broader view, including factors such as the seriousness of the offense, pervasiveness of the misconduct or a history of other misconduct.
• SDNY Program v. NSD Policy. The Program does not expressly carve out from the covered conduct export control violations, which remain subject to the NSD Policy and require NSD approval.

Given the Program’s emphasis on timely reporting, the Program creates another incentive for companies to consider whether their compliance programs appropriately emphasize identifying potential misconduct early, allowing for timely assessment of whether to make a disclosure.

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[1] U.S. Dep’t of Just., SDNY Announces Corporate Enforcement and Voluntary Self-Disclosure and Cooperation Program for Financial Crimes (Feb. 24, 2026), available here.

[2] Specifically, conduct covered by the Program includes: “(a) fraud by a company or corporate entity, or an employee, officer, director, or agent of such an entity; (b) fraud in connection with a securities, commodities, or digital asset offering, or the trading or brokering of securities, commodities, or digital assets; (c) false statements or fraud upon an auditor or federal regulator of financial markets; or (d) other willful violations of the Securities Act of 1933, Securities Exchange Act of 1934, the Commodity Exchange Act, Investment Advisers Act of 1940, and Investment Company Act of 1940 that undermine the integrity of financial markets or harm customers, competitors, or market participants.” U.S. Dep’t of Just., SDNY Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes (Feb. 24, 2026), available here.

[3] Id.

[4] Id. 

[5] U.S. Dep’t of Just., Damian Williams and Breon Peace Announce New Voluntary Self-Disclosure Policy for United States Attorney’s Offices, available here.

[6] U.S. Dep’t of Just., SDNY Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes (Feb. 24, 2026), available here.

[7] U.S. Dep’t of Just., 9-47.120 - Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy (May 12, 2025), available here; U.S. Dep’t of Just., Department of Justice Corporate Whistleblower Awards Pilot Program (May 12, 2025), available here.

[8] U.S. Dep’t of Just., NSD Enforcement Policy for Business Organizations (Mar. 7, 2024), available here.

[9] For instance, on September 3, 2025, the United States Attorney’s Office for the Eastern District of Pennsylvania launched its own Corporate Transparency Initiative to encourage companies to self-report potential criminal conduct, “independent of any procedure or protocol set forth by the Criminal Division at Main Justice.” U.S. Dep’t of Just., Corporate Transparency Initiative (Sept. 3, 2025), available here.