Monday, September 14, 2015

DAG Yates Issues Memo re Corporate Wrongdoing and Individual Criminal Liability

Deputy Attorney General Sally Yates has issued a memorandum regarding "Individual Accountability for Corporate Wrongdoing."  The memorandum describes important new priorities and policies regarding the prosecution of individual employees, not just corporations, in cases involving corporate crime.

From the memorandum:
Fighting corporate fraud and other misconduct is a top priority of the Department of Justice. Our nation's economy depends on effective enforcement of the civil and criminal laws that protect our financial system and, by extension, all our citizens. These are principles that the Department lives and breathes- as evidenced by the many attorneys, agents, and support staff who have worked tirelessly on corporate investigations, particularly in the aftermath of the financial crisis.

One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing. Such accountability is important for several reasons: it deters future illegal activity, it incentivizes changes in corporate behavior, it ensures that the proper parties are held responsible for their actions, and it promotes the public's confidence in our justice system.
The memorandum goes on to make substantive changes to the Principles of Prosecution of Business Organizations (USAM 9-28.000 et seq.), available here.  The changes fall into 6 categories:

  1. To be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct. 
  2. Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation.
  3. Criminal and civil attorneys handling corporate investigations should be in routine communication with one another. 
  4. Absent extraordinary circumstances, no corporate resolution will provide protection from criminal or civil liability for any individuals. 
  5. Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires and declinations as to individuals in such cases must be memorialized. 
  6. Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual's ability to pay. 

Read the entire memorandum here.  The New York Times also has an article about the memorandum here.

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