A new memo issued Wednesday, September 9th, by the Department of Justice (the “Department” or “DOJ”) has reiterated the Department’s commitment to pursuing individuals in connection with corporate misconduct. The memo, authored by Deputy Attorney General Sally Quillian Yates, identified six principles for government lawyers to follow in connection with this commitment: (1) that corporations must provide the DOJ all relevant facts relating to individuals responsible for misconduct in order to qualify for cooperation credit; (2) that criminal and civil corporate investigations should focus on individuals from the start; (3) that DOJ’s criminal and civil lawyers should coordinate and communicate routinely in corporate investigations; (4) that DOJ will not release individuals from criminal or civil liability when resolving a corporate investigation absent extraordinary circumstances or a stated policy (such as the Antitrust Division’s Corporate Leniency Policy); (5) that DOJ attorneys should not resolve a case against a corporation without a plan to bring or resolve related cases against individuals, including memorializing any decision not to prosecute individuals; and (6) that DOJ’s civil attorneys should focus on both individuals and the corporation in deciding whether to bring suit and should consider factors beyond an individual’s ability to pay any penalty or fine.
The DOJ’s emphasis on individual accountability is not new, nor is the idea that cooperating companies must provide all relevant information in this regard. Just as one example, in a speech given a year ago at the GIR Live conference in New York, Principal Deputy Assistant Attorney General Marshall L. Miller commented that “[t]he prosecution of individuals—including corporate executives—for white-collar crimes is at the very top of the Criminal Division’s priority list.” Miller noted that the heart of effective corporate cooperation is “whether that cooperation exposed, and provided evidence against, the culpable individuals who engaged in criminal activity.” As an example, Miller pointed to how in 2012, a prominent investment bank identified a responsible executive and provided evidence against him in connection with a DOJ investigation. Miller cited this cooperation as a prime motivating factor in the decision not to prosecute the bank. Miller explained in closing his remarks that companies seeking cooperation credit should focus internal investigations on securing evidence of individual culpability and emphasize that evidence in any discussion with government attorneys.
While the message may not be new, DOJ’s decision to re-emphasize it is noteworthy, and presumably relates to public sentiment that too few individuals have been “held accountable” for corporate misconduct, such as in connection with the financial crisis. Companies deciding to self-report and cooperate with a government investigation should not be surprised later when prosecutors expect assistance in pursuing employees before they award cooperation credit.