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.
