Issuance of the second “Monaco Memo” by the Department of Justice in October 2022, which places an even greater emphasis on self-reporting of wrongdoing by corporations, has reignited discussion about the propriety of disclosure to government agencies. Perhaps some of the greatest debates between outside counsel and their corporate clients occur over issues of whether to self-report and, if so, the timing and manner of doing so. Direct and collateral consequences need to be considered, often requiring a complex and nuanced analysis.
Yet this discussion tends to be more settled for entities supervised by the New York State Department of Financial Services (DFS). That is because numerous self-reporting obligations already reside in New York statutes, regulations and supervisory agreements with regulated entities. These rules require or encourage timely—sometimes even immediate—disclosure of a wide range of incidents, misconduct and criminal activity.
