Five considerations for white collar enforcement under Trump's second administration

As President-Elect Donald Trump prepares to take office in January, the Department of Justice (DOJ) is poised for transformation. While political pundits focus and speculate on potential nominees, the legal industry faces a more pressing concern: How will the new administration impact white-collar prosecutions and regulatory enforcement?

CONGRESSIONAL INQUIRIES: Extending beyond the DOJ, companies may need to consider the potential for increased inquiries by Congress. Congressional inquiries can serve as a way for Administrations to more directly shape the focus of enforcement priorities without the multi-step processes often involved in DOJ investigations. A Republican-controlled Congress could focus its investigative resources outward, focusing on private industry. Areas such as social media moderation, Diversity, Equity, and Inclusion initiatives, and ESG policies are prime candidates for congressional scrutiny. Congress could also focus on issues that intersect with national security, trade policy, and technology (e.g., semiconductor manufacturing equipment regarding business sales to China). And businesses may see a more active House Select Committee on Strategic Competition between the U.S. and the Chinese Communist Party. It is unclear whether these investigations will require businesses to navigate overlapping DOJ, SEC, and congressional inquiries, or whether congressional investigations will be something a company has to manage in lieu of DOJ investigations and prosecutions.

INDUSTRY FOCUS: Certain industries may face increased enforcement in 2025 and beyond as is typical with Administration changes. For example, the health care sector could be a prime target for the DOJ going forward, with initiatives like the False Claims Act (FCA) yielding significant recoveries from fraudulent billing and kickback schemes. This dovetails with the goals of the "Department of Government Efficiency." A second Trump administration could leverage the FCA to curb federal health care fraud, aligning with broader promises to safeguard taxpayer dollars and reduce government spending.

FOREIGN BUSINESSES: While President Trump took an aggressive approach against China in his first administration, this approach was carried on, to some degree, by President Biden. The next administration will likely continue to pursue sanctions and trade-related enforcement, especially against China and may expand into other regions such as Iran. Additionally, thematic sanctions, such as those focused on human rights, corruption and cybersecurity, could gain greater prominence as part of a renewed emphasis on combating foreign bribery and global corruption.

President Trump has emphasized an "America First" agenda, strongly supporting American businesses. There is the potential that the DOJ under a Trump administration may adopt a two-tiered approach to resolving matters: one applying heightened scrutiny to foreign businesses (for example, Chinese companies or U.S. businesses with significant operations in China), and another more flexible approach for U.S.-based businesses. Given the significant costs and impacts of DOJ investigations, the department may, in certain instances, seek to avoid disadvantaging U.S. companies by declining to pursue charges or requiring less severe penalties to resolve the investigation. This discretion could reflect an effort to support American businesses competing against foreign companies.

WHISTLEBLOWERS: Whistleblower programs introduced under the Biden administration have incentivized self-reporting and corporate transparency. These initiatives, particularly in the health care and financial sectors, may expand, offering enhanced rewards and protections for whistleblowers. Self-disclosure and internal reporting mechanisms dovetail with Trump's broader deregulation agenda, encouraging corporations to foster whistleblower-friendly cultures and reduce fraud, rather than requiring expensive government inquiries to police the same conduct.

INDIVIDUAL ACCOUNTABILITY: The DOJ under President Trump's first administration emphasized individual accountability, pursuing criminal charges against executives and employees. There is no reason to think that these priorities will not be present in the new administration. Additionally, during the first Trump presidency the DOJ oversaw robust FCPA enforcement in terms of both the amount of fines imposed and the number of enforcement actions. Given the continued focus on combating global corruption, particularly in regions like China, this emphasis on the FCPA will likely be front and center in 2025 and beyond.

As the DOJ recalibrates its enforcement priorities under the second Trump administration, corporations may want to look at reinforcing their compliance strategies. Enhanced internal reporting mechanisms, a culture of transparency, and robust self-assessment systems are critical for mitigating risks. Companies in certain industries (e.g., health care, social media) and with a large presence in China may also want to be prepared for not only DOJ scrutiny, but congressional inquiries. Businesses should be prepared to navigate a changing regulatory environment. Companies should try to be nimble in addressing potential risks and determining whether, or how, to align their compliance strategies with the anticipated shifts in enforcement priorities.

The opinions expressed in this article are those of the authors and do not necessarily reflect the views of Skadden or its clients.