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DOJ Declines Prosecution of Private Equity Firm Under M&A Safe Harbor Policy

July 21, 2025
In a first-of-its-kind decision, the Department of Justice (DOJ) recently declined to prosecute a private equity (PE) firm for violations of U.S. sanctions and export laws committed by a newly acquired company – marking the DOJ’s first use of its M&A Safe Harbor Policy.

Why It Matters:

  • DOJ is signaling that PE firms that self-report newly-discovered portfolio company misconduct and remediate quickly can avoid prosecution — even for serious violations like sanctions evasion.
  • This case shows how DOJ’s Safe Harbor Policy works in practice and offers a roadmap for managing post-acquisition risks.
Key Points:

  • A newly acquired portfolio company had violated U.S. sanctions and export control laws
  • PE firm was covered by DOJ’s M&A Safe Harbor Policy because:
    • It made a voluntary self-disclosure to the DOJ shortly after it discovered the misconduct.
    • It cooperated fully with the government’s investigation.
    • The portfolio company promptly took effective remediation steps.
    • The portfolio company agreed to pay significant penalties and forfeiture.

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