by William J. Stellmach, Amelia A. Cottrell, Elizabeth P. Gray, Paul J. Pantano Jr., Neal E. Kumar, and Samantha G. Prince
A recent decision by a federal judge in Illinois caps a series of setbacks for federal prosecutors bringing cases born out of parallel investigations with U.S. regulatory agencies. Increasingly, courts have faulted the U.S. Department of Justice (“DOJ”) and regulatory agencies for failing to ensure that their respective investigations remain separate and distinct, triggering broader disclosure obligations for prosecutors. Those higher hurdles, while increasing government transparency for those being investigated, may also increase the risk of greater costs for financial institutions and companies confronting multiple, uncoordinated investigations. If government authorities interpret their latest reversals as mandating less coordination and collaboration with one another, then investigatory targets may ultimately pay the price.