Individual Accountability: Jay Clayton’s Enforcement Continuity – Securities
FL
Foley & Lardner
Foley & Lardner LLP looks beyond the law to focus on the constantly evolving demands facing our clients and their industries. With over 1,100 lawyers in 24 offices across the United States, Mexico, Europe and Asia, Foley approaches client service by first understanding our clients’ priorities, objectives and challenges. We work hard to understand our clients’ issues and forge long-term relationships with them to help achieve successful outcomes and solve their legal issues through practical business advice and cutting-edge legal insight. Our clients view us as trusted business advisors because we understand that great legal service is only valuable if it is relevant, practical and beneficial to their businesses.
Recent remarks by Jay Clayton, United States Attorney for the Southern District of New York (SDNY), continue to emphasize Clayton’s priority on individual accountability — a bad actor should not take down an otherwise good company.
United States
Corporate/Commercial Law
To print this article, all you need is to be registered or login on Mondaq.com.
Foley & Lardner are most popular:
- within Coronavirus (COVID-19), Cannabis & Hemp and Insolvency/Bankruptcy/Re-Structuring topic(s)
Recent remarks by Jay Clayton, United States Attorney for the
Southern District of New York (SDNY), continue to emphasize
Clayton’s priority on individual accountability — a bad
actor should not take down an otherwise good company.
While speaking at the Securities Enforcement Forum on February
5, 2026, Clayton indicated that his office may decline to prosecute
companies that fully and proactively cooperate with SDNY
investigations. The goal is to provide enhanced incentives to
companies that cooperate in criminal investigations, offering
clearer and more immediate benefits such as initial, conditional
agreements in which prosecutors decline to prosecute companies.
Clayton underscored his plan to quickly offer Non-Prosecution
Agreements (NPAs), which are contracts where a prosecutor agrees
not to pursue criminal charges in exchange for cooperation and
compliance with specific conditions. While NPAs have always been an
available tool, the strategy to offer NPAs earlier with continued
cooperation is more novel.
As chairman of the U.S. Securities and Exchange Commission
(SEC), Clayton focused on individual accountability. In that role,
he repeatedly highlighted that investor protection and market
integrity required holding specific actors responsible for
wrongdoing. SEC enforcement under his leadership often combined
corporate settlements with targeted charges against officers,
directors, or gatekeepers. For instance, in fiscal year 2017 and
2018, the SEC’s Division of Enforcement reported charging
individuals in 73% and 72% of its filed cases, respectively.
Last week’s remarks show that focus remains. By
incentivizing corporate partners to help identify and build cases
against culpable executives, managers, or employees, Clayton is
echoing his longstanding belief that guilt should be personal, and
the most effective deterrent is achieved when responsible
individuals — not just abstract corporate entities —
face consequences.
For corporate counsel, executives, and compliance leaders, the
lessons are consistent across both enforcement contexts. When
facing scrutiny, an organization’s response can profoundly
influence outcomes. Rapid internal investigation, clear
documentation, thorough cooperation, and readiness to assist in
identifying individual wrongdoers should be embedded into
incident‑response protocols. By doing so, companies not only
align themselves with current enforcement priorities but also
protect their broader institutional interests and can now benefit
from clearly defined cooperation incentives in the SDNY.
Key Takeaways for Businesses and Counsel
- Proactive cooperation
matters: Swift self‑reporting and meaningful, early
assistance to prosecutors can position a company to avoid
prosecution. - Strengthen
incident‑response protocols: Develop processes for
rapid investigation, transparency, and cooperation with
authorities. - Invest in compliance
culture:A strong tone from the top and clear internal
reporting channels can help detect issues early and demonstrate
good faith to prosecutors and regulators.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
[View Source]
link
