Reported by Dave Michaels and Sadie Gurman

(Summary shared below. To read full report, go to: https://www.wsj.com/finance/regulation/the-justice-department-is-pulling-back-on-prosecuting-corporate-crime-dabf95a2?eafs_enabled=false)

The Justice Department has sharply reduced its use of criminal charges against corporations, increasingly resolving investigations through nonprosecution agreements or closing cases without filing charges. The shift reflects the Trump administration’s stated preference for holding individual wrongdoers accountable rather than prosecuting businesses, though critics note that many recent cases have resulted in neither corporate convictions nor charges against executives.

Recent resolutions involving Alibaba, EagleBank and Abbott Laboratories illustrate the new approach. In each case, prosecutors concluded investigations without criminally charging the companies, despite allegations that senior executives or managers were involved in misconduct. Alibaba agreed to pay $325 million and admitted facilitating more than $200 million in illicit pharmaceutical-related sales under a nonprosecution agreement, while EagleBank admitted compliance failures tied to improper lending practices but also avoided criminal charges.

Justice Department officials say corporate misconduct is still being addressed through public settlements, financial penalties and compliance obligations. Acting Attorney General Todd Blanche has argued that prosecuting individuals provides a stronger deterrent than pursuing corporations, emphasizing that “companies don’t go to jail, people do.” However, legal experts say the anticipated increase in prosecutions of executives has yet to materialize, leading some to conclude that both companies and individuals are receiving more lenient treatment.

The policy marks a notable departure from recent years, when dozens of companies annually pleaded guilty or entered deferred prosecution agreements over corporate misconduct. While the Justice Department maintains that each decision is driven by the facts and evidence, the evolving enforcement strategy signals a broader shift in corporate criminal enforcement, with greater emphasis on negotiated settlements and fewer criminal prosecutions against businesses.