Clayton Addresses the Uncertainty Surrounding SDNY’s Self-Disclosure Program

On April 14, 2026, at a conference hosted by New York University School of Law’s Program on Corporate Compliance and Enforcement, Jay Clayton, the U.S. Attorney for the Southern District of New York (SDNY), publicly addressed whether the Department of Justice (DOJ)’s recently announced Department-wide Corporate Enforcement and Voluntary Self-Disclosure Program (CEP) supersedes SDNY’s own Corporate Enforcement and Voluntary Self-Disclosure and Cooperation Program (the SDNY Program). Clayton stated that the two policies are not in tension and that his Office continues to invite companies to self-report misconduct under the SDNY Program.

Clayton’s remarks are notable given the uncertainty surrounding the two policies since the DOJ CEP was announced on March 10, 2026—just weeks after SDNY launched its Program on February 24, 2026. As Sidley has analyzed in two prior Updates, the DOJ CEP expressly replaces “all prior non-antitrust component-specific corporate enforcement policies” and its accompanying press release stated that the CEP supersedes “all component-specific or U.S. Attorney’s Office-specific corporate enforcement policies currently in effect”—raising the question of whether the SDNY Program remains in effect. At the same time, the DOJ CEP reaffirms prosecutorial discretion, leaving open the possibility that SDNY could treat the CEP as a baseline while maintaining an office-specific incentive. Nonetheless, Clayton’s assertion that the policies are not in conflict does not necessarily resolve some of the substantive differences between the two frameworks, and companies seeking leniency under either program will need to undertake careful analysis of both programs in light of the specific facts and circumstances.

Background: The Gap Between the DOJ CEP and SDNY Program

As Sidley has detailed in two prior White Collar Updates—here and here—the two policies diverge in at least five material respects.

First, the DOJ CEP covers all corporate enforcement decisions Department-wide (except the Antitrust Division), whereas the SDNY Program is limited to corporate misconduct affecting financial markets.

Second, the policies adopt different definitions of “voluntary” self-disclosure. The SDNY Program permits eligibility even where a company has knowledge of a whistleblower submission, there is public media reporting regarding the illegal conduct, or it has made a prior self-report to another government agency, provided the company has not received a grand jury subpoena or document request from the government.. The DOJ CEP, by contrast, requires that the misconduct not already be known to DOJ and that there be no “imminent threat of disclosure or government investigation”—a stricter standard that could disqualify companies eligible under SDNY’s approach.

Third, the definitions of disqualifying aggravating circumstances diverge considerably. The SDNY Program’s list of disqualifying aggravating circumstances is limited to misconduct with a nexus to terrorism, sanctions evasion, foreign corruption, trafficking, international drug cartels, slavery, or physical violence. The DOJ CEP defines aggravating circumstances more broadly to include the seriousness or pervasiveness of misconduct, severity of harm, and corporate recidivism. A company whose misconduct involves pervasive fraud causing significant financial harm—but with no nexus to terrorism or foreign corruption—could therefore still qualify under the SDNY Program but not under the DOJ CEP.

Fourth, the SDNY Program imposes more extensive ongoing obligations on its conditional declinations, including a three-year commitment to report any additional criminal conduct. DOJ CEP declinations carry no such ongoing obligations beyond the requirement to pay disgorgement/forfeiture and restitution.

Finally, the policies differ on the financial terms of a declination. The SDNY Program does not require forfeiture in addition to restitution, while the DOJ CEP requires companies to pay all disgorgement/administrative forfeiture in addition to restitution.

Tensions Remain

Despite Clayton’s assertion that the two policies are not in tension, substantive differences in the language of the policies remain, and neither SDNY nor DOJ has provided guidance on how to navigate the divergences. The stated purpose of both policies is to provide certainty and predictability to companies considering voluntary self-disclosure. And while the potential benefits of voluntary self-disclosure are significant, companies will be understandably deliberate in self-reporting misconduct and committing to significant obligations if there is a risk that a conditional declination letter could later be deemed inconsistent with the Department-wide policy and the terms of cooperation change after the company has already self-reported misconduct. Additional clarity on which standards will govern—such as the operative definition of voluntariness, the scope of disqualifying aggravating factors, the financial terms of a declination, and the duration of ongoing obligations—will also help companies considering seeking the benefits of voluntary self-disclosure.

As Sidley noted in our March analysis, the more clarity DOJ can provide as to how it will permit local discretion in implementing the CEP, the better—both for companies weighing the costs and benefits of self-disclosure and for the Department’s stated goal of increasing predictability. While Clayton’s remarks at NYU are helpful in that they indicate his intent to reconcile the two policies, additional clarity will help companies be confident that they will secure the benefits promised by one or the other program. Until DOJ does provide that clarity, companies considering self-disclosure will continue to face overlapping frameworks with potentially differing standards—precisely the situation both policies were designed to remedy.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.