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DOJ's Pursuit of Admissions - And The Risk of Settling


Matthew P. Previn, Michelle L. Rogers

On March 19, 2015, the U.S. Attorney’s Office for the Southern District of New York announced a proposed settlement of a civil fraud lawsuit against a large financial institution (bank).[1] As with many of the U.S. Department of Justice’s recent settlements, the proposed settlement includes a significant monetary penalty. However, the proposed settlement also includes two additional elements traditionally more associated with resolutions of criminal matters, but which the DOJ has increasingly sought in civil fraud cases: namely, admissions of misconduct, as well as sanctions against corporate executives involved in the alleged misconduct.

The government’s proposed settlement with the bank marks the latest, and the clearest indication yet, that the DOJ will increasingly require such nonmonetary relief in resolving civil fraud actions — and thereby make the decision whether to settle such cases extremely challenging for defendants.

Originally published in Law360; reprinted with permission. 

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