No one believes that the relatively inactive corporate crime enforcement under the new administration in its first six months will translate into the same level of inactive corporate crime enforcement going forward.

“People in compliance and legal departments and C suites need to be mindful that now is the time to shore up your compliance programs, to look and see whether there are vulnerabilities,” Rebecca Ricigliano, a partner at Crowell & Morning in New York told Corporate Crime Reporter in an interview last month. “Don’t take the recent slack in enforcement actions as a sign that this will continue. Everyone expects an uptick in scrutiny. Now is the time to take stock and invest wisely in those internal controls.”

Ricigliano is a former federal prosecutor and a former state prosecutor in the Attorney General’s office in New Jersey.

With less of an emphasis on corporate crime prosecutions at the federal level, has there been a shift to state prosecutions?

“It was a very exciting time for me to be at the Attorney General’s office in New Jersey, because I was there when you saw this shift toward state prosecutions,” Ricigliano said. “New Jersey is one of two states that do not have elected Attorneys General. The New Jersey AG is appointed by the Governor and appointed by the New Jersey Senate.” 

“The AG has extraordinary power. States did a great job of picking up the slack. They moved on their own – the states going it alone. But there were also tremendous efforts of multi-state coordination. States were leveraging their own resources and the resources of other state Attorneys General. And they can make an impact.” 

“Often, you will see states focused on consumer fraud, advertising, pricing. You see states gaining expertise in that area and pushing it forward.” 

“When I was there I felt it. There was a downshift in prosecution at the federal level and the states were picking up the slack. They were doing impact litigation, maybe not so much on the criminal side, but on the civil enforcement side to the benefit of consumers. That was impactful and the states stepped up.”

What part of your work is defending state prosecutions and what part is federal?

“It is overwhelmingly federal. There have been times over the past four years where I have represented clients in state grand jury actions and other state investigations.  But at any given time it is as much as 80/20 skewing federal.”

What are you noticing in terms of corporate crime enforcement under Biden?

“There were a lot of predictions after the election about how the Biden administration would focus on white collar crime and everyone will see the uptick. I don’t think we have seen that yet. The obvious reason is that the leadership at the Department of Justice and at the U.S. Attorneys’ offices is still in transition.” 

“As early as the first part of 2022 we should be seeing clear priorities coming out of the Department of Justice. Same for the U.S. Attorneys’ offices. Everyone expects there to be a focus on corporations and corporate individuals. Part of the lag has been due to this transitional state.”

The director of enforcement at the SEC is Gurbir Grewal, was previously the Attorney General in New Jersey. Did you know him when you were at the New Jersey Attorney General’s office? 

“He came on board at the SEC just a couple of months ago. I did work with director Grewal, but not when he was the state AG. When I was at the Attorney General’s office in New Jersey, he was the Bergen County prosecutor.”

“It did not surprise me that the director of  SEC enforcement came from the New Jersey Attorney General’s office. It has a significant amount of authority. One of the thing he oversaw there was the Division of Consumer Affairs. That division has the bureau of securities within it. It’s like a mini SEC within the state of New Jersey.”

“Gurbir was a tremendous Attorney General. He also has federal prosecution experience. He was an AUSA both in the Eastern District of New York and in the District of New Jersey, where he did complex white collar cases as well. He provides a unique background in experience. He has both federal prosecution experience from two different districts, which is not typical, and the state Attorney General experience.”

[For the complete q/a format Interview with Rebecca Ricigliano, see 35 Corporate Crime Reporter 36 (September 20, 2021, print edition only.]