September 10, 2015

DOJ Unveils New Policy Directing Federal Prosecutors to Hold Individuals Accountable for Corporate Misconduct

On September 9, 2015, the Deputy Attorney General issued an internal memo directing federal prosecutors to focus on individuals when investigating allegations of corporate misconduct and to hold individuals accountable in resolving both criminal prosecutions and civil actions arising out of corporate misconduct. DOJ prosecutors are directed to focus on building cases against alleged individual wrongdoers from the inception of an investigation and, absent extraordinary circumstances or approved DOJ policy (such as the Antitrust Division's  Corporate Leniency Policy), the DOJ will not resolve a matter against a corporation and provide individuals with protection from criminal or civil liability. “Department lawyers should not agree to a corporate resolution that includes an agreement to dismiss charges against, or provide immunity for, individual officers or employees,” states the guidance from Deputy Attorney General Sally Yates.  

The Yates Memo represents a significant departure from the DOJ’s practice in recent years of resolving investigations of corporate misconduct with corporate plea agreements, or deferred prosecution agreements, and no corresponding charges against the individuals involved in the alleged wrongdoing. The Yates Memo applies to all future investigations of corporate wrongdoing as well as pending matters, to the extent practicable.

Significant aspects of the Yates Memo include:

1. Requires Disclosure of All Relevant Facts Relating to Individual Misconduct

The Yates Memo requires corporations to completely disclose all relevant facts about the individuals involved in misconduct as a prerequisite to receiving any consideration for cooperation under the Principles of Federal Prosecution of Business Organizations. Disclosure of all relevant facts relating to individual misconduct is now a “threshold requirement” that must be met in order for a corporation to be eligible for cooperation credit. 

2. Applies to Civil Corporate Matters as well as Criminal Prosecutions

Under the Yates Memo, corporations are required to disclose all relevant facts relating to individual misconduct in order to receive any consideration in negotiations relating to settlement of a civil investigation or lawsuit brought by the DOJ. The Yates Memo dictates, for example, the Department's position on "full cooperation" under the False Claims Act will be that, at a minimum, all relevant facts about responsible individuals must be disclosed. 

3. Directs the DOJ to Revise Existing Policies and Guidance to Reflect the Focus on Holding Individuals Accountable

The Yates Memo, which applies to all future investigations of corporate wrongdoing and pending matters to the extent practicable, requires the DOJ to revise existing policies and guidance relating to considerations relevant to determining whether a corporation will be eligible for cooperation credit. Most notably, this includes the U.S. Attorneys’ Manual’s Principles of Federal Prosecution of Business Organizations.

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