DOJ's new compliance counsel to provide 'reality check'

There's a new face at the Department of Justice (DOJ), and it's one that the agency hopes will provide a "reality check" for corporate compliance programs throughout the country.

Hui Chen--who previously held senior compliance positions in the banking and pharmaceutical industries--began her post Nov. 4 as compliance counsel in the DOJ's fraud section. Although the DOJ has been oddly tight-lipped about the appointment, unnamed sources told Bloomberg that Chen would occupy the position.

Without naming Chen directly, Assistant Attorney General Leslie R. Caldwell outlined the expectations of the new position in a speech at the Securities Industry and Financial Markets Association Compliance and Legal Society New York Regional Seminar. Caldwell said the position is designed to help determine whether compliance programs are "thoughtfully designed and sufficiently resourced" or simply serve as "window dressing." Chen will also assist prosecutors seeking remedial compliance measures.

Caldwell also squashed rumors that DOJ is moving toward a "compliance defense," which would allow companies to argue that fraud occurred because a rogue employee skirted established policies.

"Rather, the Criminal Division will continue to review companies' compliance programs as one of the many factors to be considered when deciding whether to criminally charge a company or how to resolve criminal charges," she said. "Our hiring of a compliance counsel should be an indication to companies about just how seriously we take compliance."

However, Caldwell added that DOJ is "not interested in prosecuting mistakes or accidents," but instances where egregious conduct occurs. In that regard, Chen--who oversaw compliance programs at Standard Chartered Bank, Pfizer and Microsoft--will provide valuable expertise regarding aspects of a compliance program, including whether the program has sufficient resources, clear policies and adequate enforcement of those policies.

The new position reinforces the government's ongoing emphasis on compliance. In April, the Office of Inspector General, along with the American Health Lawyers Association (AHLA) and the Health Care Compliance Association, released guidance aimed at helping governing board address compliance issues. Since then, legal experts have highlighted the need for a robust corporate compliance program, particularly as it relates to fraud prevention. Last month, corporate compliance issues were an ongoing theme at the Fraud and Compliance Forum, hosted by AHLA.

To learn more:
- here's Leslie Caldwell's speech
- read the Bloomberg article

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