2010 Proposed Amendments to the Sentencing Guidelines, Policy Statements and Official Commentary On January 21, 2010, the United States Sentencing Commission released a proposal which, if adopted, would make changes to the guidelines for the sentencing of organizations. The Guidelines and Official Commentary in §8B2.1 of the Sentencing Guidelines Manual describe what an organization must do in order to have an “effective” compliance and ethics program. Having such a program is considered a mitigating factor in sentencing. Federal and state regulatory agencies rely on the Guidelines and Commentary in deciding whether to impose sanctions in enforcement proceedings.
1. The proposed amendment would change the commentary to clarify the remediation efforts required to satisfy the seventh requirement for an effective compliance and ethics program. The current guideline states as follows:
If unlawful conduct is detected, an organization shall take reasonable steps to respond appropriately to conduct and prevent further similar conduct, including making any necessary modifications to an organization’s compliance and ethics program. (emphasis added)
The proposed amendment describes the reasonable steps to respond appropriately after criminal conduct is detected, including remedying the harm caused to identifiable victims and payment of restitution.
2. The proposed amendment also contains two additions to the Commentary. The first would include a new paragraph to clarify what is expected of high-level personnel and substantial authority personnel. It states:
Such personnel "should be aware of the organization’s document retention policies and conform any document retention policy to meet the goals of an effective compliance program under the guidelines and to avoid any liability under the law."
The second addition would clarify that when an organization periodically assesses the risk of whether criminal conduct might occur, the "nature and operations of the organization with regard to particular ethics and compliance functions" should be included among the other matters assessed.
This bracketed addition also states, as an example, that "all employees should be aware of the organization’s document retention policy or policies and conform any document retention policy to meet the goals of an effective compliance program under the guidelines and to avoid any liability under the law".
3. Finally, the proposed amendment makes technical and conforming changes. An issue for comment is also included on whether to encourage direct reporting to the board by responsible compliance personnel by allowing an organization with such a structure to benefit from a three level mitigation of the culpability score, even if high-level personnel are involved in the criminal conduct.
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