Liberty Mutual and BofA Securities
In 2025, the U.S. Department of Justice (DOJ) declined prosecution in two criminal cases, despite evidence of bribery in one case, and market manipulation in the other. This article explores both cases and the lessons they provide for other companies that are interested in reaching a favorable resolution with the government.
Case Summaries
The first case concerned violations of the Foreign Corrupt Practices Act (FCPA) by insurance company Liberty Mutual. As described in Liberty Mutual’s declination letter, the government’s investigation found evidence that, between approximately 2017 until 2022, Liberty Mutual’s Indian subsidiary, Liberty General Insurance (LGI), paid approximately $1.47 million in bribes to officials at six state-owned banks in India in exchange for the state-owned banks referring bank customers to LGI’s insurance products.
“Certain LGI employees took steps to conceal the true nature of the payments, including by classifying the payments as marketing expenses and using third-party intermediaries to make the payments to the officials,” the declination letter states. The bribe scheme resulted in approximately $9.2 million in revenue and $4.7 million in profits.
The other case concerns Bank of America Securities (BofA Securities), the investment banking arm of Bank of America. In the BofA Securities case, the DOJ stated that it found evidence that, between approximately November 2014 and April 2020, two BofA Securities employees — one, a former junior trader, and the other, a former senior trader on its U.S. Treasuries desk — separately engaged in unlawful “spoofing” schemes to manipulate the price of certain U.S. Treasury securities traded in the secondary (or “cash”) market.
One of those employees also engaged in a spoofing scheme to manipulate the futures market. Collectively, more than 1,000 spoof orders were entered.
Declination Details
In both cases, the DOJ stated that it decided to decline prosecution based on an assessment of factors set forth in the Criminal Division’s Corporate Enforcement and Voluntary Self Disclosure Policy (CEP), as it was revised in May 2025.
Whereas earlier versions of the CEP provided companies with only the “presumption” that they’d receive a declination, the May 2025 updates established that the DOJ “will” decline to prosecute, so long as corporate defendants meet certain factors in their criminal cases.
Those factors, as they were each met by Liberty Mutual and BofA Securities in their respective resolutions, are as follows:
Voluntary Self-Disclosure: Liberty Mutual timely and voluntarily self-disclosed the misconduct to the Fraud Section in March 2024, “which was identified during an internal investigation that was still ongoing at the time of the disclosure,” the DOJ stated. Similarly, BofA Securities voluntarily self-disclosed after first becoming aware of information from a third-party securities exchange regarding suspicious trades conducted by the junior trader, its declination letter stated.
“The Fraud Section’s decisions to decline prosecution of Bank of America Securities and Liberty Mutual, despite the companies’ acknowledged spoofing and foreign bribery, is a reminder to corporate counsel of the potential benefits of self-disclosing misconduct,” said Jason Manning, a partner at law firm Levy Firestone Muse.
Full and Proactive Cooperation: Both Liberty Mutual and BofA Securities also engaged in full and proactive cooperation, including by providing all known relevant facts about the misconduct, including information about the individuals involved. BofA Securities further provided “substantial data analysis of their trading conduct.” Additionally, both companies agreed to continue cooperation with any ongoing government investigations and any potential future prosecutions.
Timely and Appropriate Remediation: Both Liberty Mutual and BofA Securities engaged in a “thorough and systematic root-cause analysis” and separated themselves from those involved in the misconduct. BofA Securities further engaged in an “internal review of the trading of all traders on its U.S. Treasuries desk,” its declination letter stated.
Compliance Program Enhancements: As an extension of remediation, both companies made significant improvements to their compliance programs and internal controls. According to Liberty Mutual’s declination letter, improvements included enhanced vetting, monitoring, and oversight of payments to third parties throughout its global markets, structural reorganization coupled with increased legal and compliance resources, and the implementation of enhanced compliance policies, including with respect to use of social media and ephemeral messaging applications for business purposes.
According to BofA’s declination letter, enhancements included improvements to its surveillance programs and parameters and external testing of its internal controls. The DOJ did not provide further details on how BofA specifically improved its surveillance programs and parameters.
No Aggravating Circumstances: The CEP requires the absence of any aggravating circumstances. In both the Liberty Mutual and BofA Securities declinations, the DOJ explicitly cited the absence of aggravating circumstances.
Disgorgement of Ill-Gotten Gains: Under the terms of each declination agreement, both Liberty Mutual and BofA Securities agreed to disgorge ill-gotten gains. BofA Securities additionally paid $3.6 million into a victim compensation fund.
Compliance Message
In remarks delivered at an ethics and compliance conference in October 2025, Acting Assistant Attorney General Matthew Galeotti reminded companies that they may still obtain benefits under the CEP if they don’t qualify for a declination.
“Companies that voluntarily self-disclose misconduct and provide full cooperation and remediation, but are ineligible for a declination,” Galeotti explained, “will generally receive a non-prosecution agreement with a term of fewer than three years, no independent monitor, and a reduction of 75% off the low end of the Guidelines fine range.”
As for other key takeaways, the Liberty Mutual declination is “a significant development that helps clarify the DOJ’s current approach to FCPA enforcement,” said Alexander Birkhold, a partner at ArentFox Schiff. “It offers hope for companies that invest in compliance and transparency, but also highlights the need for thorough preparation before self-disclosing potential misconduct.”
Additionally, Birkhold added, the DOJ’s declination letter highlighting Liberty Mutual’s significant improvements to its compliance program and internal controls “sets a useful benchmark for the level of remediation and compliance program effectiveness expected by the government.”
ACI’s “16th Annual Forum on AML and Sanctions Compliance for the Insurance Industry” will be held March 3–4, 2026, in New York, NY. For more information, and to register, please visit: https://www.americanconference.com/aml-ofac-insurance/