Justice Department Guidance for Corporate Investigations


Paul CogswellBy Paul Cogswell, JD, CFE, CCEP

The United States Department of Justice (Deputy Attorney General Sally Quillian Yates) recently provided guidance in the form of a memorandum to all senior Justice Department personnel and United States Attorneys.  The subject was “Individual Accountability for Corporate Wrongdoing” and reinforced existing principles in place as well as highlighted some important considerations that should be taken when prosecuting corporate crime.  The memorandum reflects some policy shifts in Justice and comes after a review of prior prosecutions in this area.

For whatever reasons the memorandum was issued, it should give compliance professionals some potential guidance as well when conducting internal investigations.  Specifically, the steps listed below compel corporations to disclose “all facts” in order to seek credit and also encourages cross cooperation between civil and criminal attorneys involved in the prosecution.  Perhaps more important than this, step (5) instructs attorneys not to resolve matters without resolving individual prosecutions as well.  The below excerpted steps are included from the memorandum as well as a link to the complete memo:

“The guidance in this memo reflects six key steps to strengthen our pursuit of individual corporate wrongdoing, some of which reflect policy shifts and each of which is described in greater detail below: (l) in order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct;(2) 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 or approved departmental policy, the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation; (5) Department attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declination as to individuals in such cases; and (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. ”

The quote I found most interesting is “to be eligible for any credit for cooperation, the company must identify all individuals involved in or responsible for the misconduct at issue, regardless of their position, status or seniority, and provide to the Department all facts relating to that misconduct.”

How this will affect prosecutions going forward or whether it signals a change is left to the readers,  the Yates Memo does signal that the Justice Department wants to provide a uniform understanding among all districts towards holding individuals criminal accountable when prosecutions of corporations are undertaken.

I am interested in hearing the thoughts of my colleagues and welcome feedback.

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  1. Thanks for sharing the key steps to strengthen our pursuit of individual corporate wrongdoing. And yes, memorandum gives some potential guidance to compliance professionals.

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