After prolonged criticism over its lack of prosecution of individuals responsible for corporate misconduct, the Justice Department has issued new internal guidance that makes clear that prosecuting individuals in white collar cases is a high priority and should be considered at the very early stages of a corporate misconduct investigation.
The guidance, issued Wednesday, gives prosecutors six directives targeted at increasing prosecutions against individuals:
- First, for companies to receive any “cooperation credit” in their settlement negotiations with the Department, corporations must provide the Department with all relevant facts relating to the individuals responsible for the misconduct. In other words, companies are going to have bring forward evidence that the government can marshal straight into the grand jury to indict corporate executives.
- Second, DOJ criminal and civil attorneys are required to focus on individuals – not just the corporations – from the very beginning of their corporate misconduct investigations.
- Third, criminal and civil attorneys handling these investigations have to be in routine communication with one another so that they have the full panoply of remedies available against individuals in every case.
- Fourth, absent extraordinary circumstances, no corporate resolution may provide protection from criminal or civil liability for any individuals. Unless approved by the U.S. Attorney or relevant Assistant Attorney General, corporate resolutions cannot include terms that dismiss charges or provide immunity for corporate executives.
- Fifth, DOJ attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases before the statute of limitations expires. Any declinations as to individuals in such cases must be memorialized and approved by the U.S. Attorney or the Assistant Attorney General in charge of the investigation, or their designee.
- Sixth, DOJ civil attorneys must focus their cases on individuals, in addition to the corporation, and decisions regarding whether to bring suit against an individual should not be controlled by the person’s ability to pay. Rather, there should be full consideration of a variety of factors, such as whether the person’s misconduct was serious.
While it remains to be seen whether this directive will result in increased prosecutions of individuals in white collar cases, the message coming from the top of the Department is clear. Prosecutors are going to have to increase their efforts to make cases against individuals and companies seeking credit for providing cooperation are going to have to thoroughly investigate and hand over the facts and evidence that lead straight to these executives.
A copy of the guidance may be found here.