On September 9, 2015, Deputy U.S. Attorney General Sally Quillian Yates issued a memorandum to all attorneys of the United States Department of Justice (“DOJ” or the “Department”) entitled “Individual Accountability for Corporate Wrongdoing” (the “Yates Memo”).The Yates Memo addressed “how the Department approaches corporate investigations, and identified areas in which it can amend its policies and practices in order to most effectively pursue the individuals responsible for corporate wrongs.”(Yates Memo, at 2).The Yates Memo represents a recent, forceful development in a global trend: law enforcement and other government authorities in multiple international jurisdictions seeking to impose criminal liability on individuals to enhance the deterrent value of corporate criminal liability. Though the Yates Memo principally re-emphasizes the DOJ’s stated commitment to prosecuting individual wrongdoers in the context of resolving cases of corporate criminal liability, the Yates Memo may also produce less expected consequences that impact both US and non-US business enterprises.
After summarizing below the key provisions of the Yates Memo, we offer our initial thoughts on the potential implications of the memorandum, and our guidance to directors, in-house counsel and senior executives who confront this new development in the increasingly challenging US legal and compliance environment.
Key Provisions of the Yates Memo
The Yates Memo guides prosecutors on the handling of cases involving both companies and individuals. In this regard, it provides six guiding principles:
- To be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct;
- Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation;
- Criminal and civil attorneys handling corporate investigations should be in routine communication with one another;
- Absent extraordinary circumstances, no corporate resolution will provide protection from criminal or civil liability for any individuals;
- 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; and
- 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.
We have summarized below what we believe to be the most significant provisions of the Yates Memo.
Corporate Cooperation Credit
The DOJ has consistently touted in recent years the benefits provided to a company that self-reports to the DOJ, cooperates with the DOJ in its investigation of, and remediates any criminal wrongdoing discovered by the company. The magnitude of such benefits has not always been clear or certain to companies and their directors, officers and counsel. However, the DOJ’s recent pronouncements provided greater transparency as to the advantages of self-reporting and cooperating, sometimes in the form of calculating the total monetary savings by reference to publicly available corporate resolutions. These announcements may have convinced some of the value of self-reporting and cooperating, though the debate on that issue is far from over.
The benefits of self-reporting and cooperating are most formally identified in the Principles of Federal Prosecution of Business Organizations contained in the U.S. Attorneys’ Manual. A company’s cooperation also may be recognized through reduced financial penalties by way of cooperation credit under the U.S. Sentencing Guidelines calculation for corporate penalties. Indeed, the cooperation provided by companies against executives may prove to be the difference between a corporate prosecution and a declination or lesser enforcement action such as a deferred prosecution agreement (DPA) or non-prosecution agreement (NPA). Credit for cooperation may also be reflected in less apparent though by no means less important ways throughout the investigation lifecycle.
Traditionally, consideration of a company’s cooperation has taken into account a number of factors including among others: (i) the extent of a company’s own internal investigation; (ii) the independence of such investigation; (iii) voluntary disclosure; (iv) production and, if necessary, translation of documents and emails; and (v) making individual witnesses available to the DOJ for interview, particularly those who reside outside of the United States. But the latest guidance from the Yates Memo indicates that the Government will deny all cooperation credit to companies that fail to “learn of such facts [relating to individual misconduct] or to provide the Department with complete factual information about individual wrongdoers,” notwithstanding any other cooperation which they may provide. The DOJ has thus placed an overriding importance on this single element of a company’s cooperation efforts, elevating it to a precondition to receiving any cooperation credit. As explained by Deputy Attorney General Yates, “if a company wants any credit for cooperation, any credit at all, it must identify all individuals involved in the wrongdoing, regardless of their position, status or seniority in the company and provide all relevant facts about their misconduct. It’s all or nothing.”
Statutes of Limitation and Tolling Agreements
Tolling agreements are designed to suspend the running of the applicable statute of limitations. The Yates Memo specifically addresses the DOJ’s future use of tolling agreements: “[w]hile every effort should be made to resolve a corporate matter within the statutorily allotted time, and tolling agreements should be the rare exception, in situations where it is anticipated that a tolling agreement is nevertheless unavoidable and necessary, all efforts should be made either to resolve the matter against culpable individuals before the limitations period expires or to preserve the ability to charge individuals by tolling the limitations period by agreement or court order.” In our experience, the DOJ has made extensive use of tolling agreements in complex corporate enforcement cases in order to extend the time available to investigate and resolve such matters. The Yates Memo appears to render tolling agreements “the rare exception,” and to limit their use to situations where it is “unavoidable and necessary” and, in such “rare” situations, the DOJ prosecutors are directed that “all efforts should be made either to resolve the matter against culpable individuals before the limitations period expires or to preserve the ability to charge individuals by tolling the limitations period by agreement or court order.” We will continue to monitor the DOJ’s use of tolling agreements and court orders relating to statutes of limitation to determine what circumstances satisfy this newly established “unavoidable and necessary” standard.
Increased, Early Cooperation Between DOJ Prosecutors and Civil Attorneys
The Yates Memo repeatedly considers both criminal and civil cases brought by DOJ attorneys. In particular, the Yates Memo advises that “[c]riminal attorneys handling corporate investigations should notify civil attorneys as early as permissible of conduct that might give rise to potential individual civil liability, even if criminal liability continues to be sought.” Further, the Yates Memo provides that “if there is a decision not to pursue a criminal action against an individual – due to questions of intent or burden of proof, for example – criminal attorneys should confer with their civil counterparts so that they may make an assessment under applicable civil statutes and consistent with this guidance.” Cooperation between DOJ prosecutors and civil attorneys is far from new. The Yates Memo reinforces this relationship by pointedly encouraging DOJ prosecutors and civil attorneys to work more closely together and establishing a protocol to foster such collaboration.
Civil Actions Against Individuals Who Lack the Ability to Pay
Historically, the DOJ has eschewed filing civil suits against judgment-proof individuals. The guidance to DOJ civil attorneys in the Yates Memo — to consider bringing cases against individuals based on considerations beyond that individual’s ability to pay —represents a significant change in policy in this regard. The objective of this policy shift appears to be to increase the number of cases brought, regardless of likely financial recovery, for the purposes of holding individuals to account for their actions and acting as a deterrent to others, especially when criminal cases cannot be brought.
The Context of the Yates Memo
The Yates Memo must be understood in its full context. Among global enforcement authorities, the DOJ has been and continues to be at the forefront in resolving complex, substantial and high-profile corporate criminal cases involving antitrust, environmental and tax violations, fraud, corruption and other misconduct. In contrast, the DOJ has had less success in prosecuting those individuals who personally perpetrated the wrongdoing underlying these corporate resolutions; historically, only a minority of corporate resolutions have been accompanied by criminal indictments or civil suits against individuals. Even in those cases when individuals have been pursued, conviction rates have been criticized, and the DOJ has recently suffered several notable trial set-backs and acquittals. The Yates Memo fails to address the difficulty in successfully prosecuting individuals for their role in complex corporate schemes — defendants who are far more likely than business entities to defend themselves through trial given the applicable prison sentences under the U.S. Sentencing Guidelines.
Members of Congress and commentators have criticized the DOJ for failing to bring a meaningful number of prosecutions in the wake of the economic crisis and well-publicized large corporate scandals, many of which involved global financial institutions. The Yates Memo may be incorrectly dismissed as simply the DOJ’s latest public effort to appear “tough on crime” or a response to claims that DOJ policy coddles wealthy executives of large financial institutions and multinational business enterprises. But balancing the fair resolution of corporate criminal cases and the just prosecution of individuals has clearly become a top policy priority for the DOJ. In doing so, the Yates Memo repeats existing DOJ policies focusing on individual prosecutions, yet may result in unintended consequences undermining multiple DOJ policy initiatives.
Analysis: Key Takeaways from the Yates Memo
Although claims that the Yates Memo represents a watershed DOJ policy are premature and exaggerated, we anticipate the Yates Memo will impact clients and their directors and General Counsel in multiple ways. Directors, in-house counsel and senior executives of both US and non-US based business enterprises should carefully examine how the Yates Memo will and will not alter US enforcement trends, thereby affecting their companies’ compliance efforts and business results. Towards this goal, we offer below our initial guidance on the Yates Memo and its implications.
1. The Yates Memo may not materially alter the existing enforcement environment in which the DOJ seeks to prosecute individuals, though its sharper tone may cause unwarranted investigative attention on employees and senior executives.
- The Yates Memo re-emphasizes the DOJ’s stated objective of prosecuting individuals who perpetrated the underlying criminal conduct in a corporate criminal resolution — a message that the DOJ has publicly proclaimed for some time.
- The dilemma faced by a cooperating company regarding whether to provide evidence against its own employees, though complex, is not new.
- When a company is charged or is cooperating with authorities, the company has incentives to deliver to law enforcement evidence implicating individuals, either as a theory of defense (e.g., the rogue employee) or as an already understood element of cooperation.
- Companies and their boards of directors have dealt with the tension between defending the company in accordance with their fiduciary duties and maintaining corporate morale and culture when management, especially senior management, is implicated in wrongdoing.
- Indeed, prior to the adoption of the Principles of Federal Prosecution for Organizations, the DOJ adhered to the Principles of Federal Prosecution (for individuals), and one individual defendant’s cooperating against another individual defendant is far from novel.
- The adequacy of the prosecution of individuals for corporate wrongdoing has long been a factor militating against the prosecution of the corporation itself, and US federal prosecutors already consider “the corporation’s timely and voluntary disclosure of wrongdoing and its willingness to cooperate in the investigation of its agents” in deciding whether to criminally charge a target business organization.
- However, the sharper tone of the Yates Memo may be misinterpreted by companies and their counsel to require targeting employees without regard to particular facts and contextual nuances.
- There have been and will be cases in which it is clearly in a company’s interest to disclose information implicating certain employees, but we do not believe that the Yates Memo required a generalized attack on all managers at a company as opposed to targeting those specific individuals who engaged in misconduct.
- In particular, when viewed in combination with other DOJ pronouncements decrying investigations that avoid examining senior executives, the Yates Memo should not be used by the DOJ to impose an inflexible standard that requires companies to extend always their internal investigation to the company’s senior executive ranks, which will substantially increase the expenses and disruption of any internal investigation.
- Further, some commentators have questioned whether the timing and substance of the Yates Memo reflects a reaction by the DOJ to increasing judicial scrutiny of corporate DPAs and resolutions.
2. General Counsel will feel increased tension in balancing their obligations to their client company with their need and desire to work closely and effectively with senior management.
- General Counsel have observed that their “multiple hats” — legal advisor to the company, business partner to senior executives and gatekeeper — are increasingly in tension if not outright conflict.
- We anticipate that General Counsel will likely be called upon to answer for the company’s board of directors the tough question of whether to “turn in” or “flip on” senior and other executives — people who immediately before this decision were likely viewed as valuable, diligent colleagues and friends.
- General Counsel should be mindful of their duties to the company, their ethical duties as lawyers and the need to be clear, to themselves and other employees, about who they represent.
- General Counsel and directors will need to carefully select outside investigation counsel with such independence, ethical and business-continuity issues in mind, including any actual or apparent bias of such counsel in favor of senior and other managers, and create a record of and be prepared to defend their decision selecting outside investigation counsel.
- Simultaneously, outside investigation counsel who serve also as a company’s regular outside corporate counsel may be more susceptible to allegations that their investigation and advice were not sufficiently independent and biased in favor of company management.
3) The binary nature of cooperation credit under the Yates Memorandum, combined with the uncertainty as to how much information on individuals is required to qualify for cooperation credit, may cause companies to undertake excessive investigation efforts.
- As noted above, the Yates Memo alters one of the Filip factors such that there is “[n]o more partial credit for cooperation that doesn’t include information about individuals.”
- While the Yates Memo requires companies to "provide to the Department all relevant facts relating to the individuals responsible for the misconduct"  it fails to address who decides whether this standard has been satisfied, or how the critical decision is made.
- Nor does the Yates Memo address how a company may secure full cooperation credit if an individual executive is asserting his or her Fifth Amendment rights against self-incrimination, thereby depriving the company of information about that individual and his or her conduct. An employee declining to cooperate in a company’s investigation may create pressure on a company to take action against such employees, which in turn may create significant employment law issues especially for employees outside the United States.
- The now binary nature of cooperation credit for the company — “all or nothing”  — combined with the uncertainty as to the adequacy of information about individuals that will secure cooperation credit, will substantially increase the pressure to obtain and provide information against individuals without providing a clear limit on those expensive efforts.
- Thus, under these conditions, in-house and/or outside investigation counsel seeking to secure cooperation credit for their company client may unnecessarily fixate on obtaining evidence against individuals to provide to the DOJ, unduly increasing the expense of conducting an internal investigation and the time devoted to doing so.
4) The Yates Memo may signal a greater willingness by the DOJ to scrutinize the scope, independence and thoroughness of a corporate investigation.
- As noted above, for a company to receive cooperation credit under the Principles of Federal Prosecution of Business Organizations, the company must under the Yates Memo completely disclose to the DOJ all relevant facts about individual misconduct.
- The Yates Memo then warns, “[i]f a company seeking cooperation credit declines to learn of such facts or to provide the Department with complete factual information about individual wrongdoers, its cooperation will not be considered a mitigating factor pursuant to USAM 9-28.700 et seq.”
- The highlighted language may permit the DOJ to scrutinize both the scope, independence and thoroughness of an investigation conducted by a company seeking cooperation credit.
- One of the most important though challenging legal decisions made on imperfect information early in an investigation, especially to the extent that criminal conduct may extend to multiple international jurisdictions, is the proper scoping of an investigation.
- The heightened scrutiny suggested by the Yates Memo could undercut recent DOJ pronouncements emphasizing that investigation counsel should be reasonable in their approach to scoping investigations, noting several FCPA investigations in which the cooperating company spent over US $100 million in legal fees and forensic costs.
- Although Deputy Attorney General Yates disclaimed this risk, her remarks fail to alleviate the day-to-day investigation reality for risk-averse clients, directors, in-house counsel and outside investigation counsel, who confront potentially receiving nocooperation credit because of their purported failure to provide sufficient information about culpable individuals.
5) The increased cooperation between DOJ prosecutors and civil attorneys promoted by the Yates Memo will result in more civil actions against individuals that take longer to completely resolve.
- We note that the increased cooperation between the criminal and civil attorneys must still comply with the Federal Rules of Criminal Procedure and DOJ policies. However, the greater involvement of DOJ civil attorneys may ameliorate a gap arising from judicial skepticism as to the jurisdiction of other government agencies (e.g., the SEC) that traditionally pursue parallel civil sanctions in complex corporate and financial fraud cases.
- Individual defendants will more frequently encounter a fully “up to speed” DOJ civil attorney who, pursuant the Yates Memo, is expressly directed to pursue individuals civilly towards deterring future misconduct and with less regard to an individual’s ability to pay.
- The increased cooperation between DOJ prosecutors and civil attorneys, who are directed to bring civil actions against individuals with far less consideration to an individual’s ability to satisfy any judgment, will result in more civil cases against individuals.
- In addition, because in parallel proceedings DOJ prosecutors will seek to stay the civil proceeding pending resolution of the criminal case, these more common civil proceedings will be instituted after the conclusion of criminal proceedings and extend the cost of and time for a complete resolution of all charges and claims against the implicated individuals.
6) The post-plea and post-settlement practices called for by the Yates Memo will likely extend the time to resolve completely a corporate criminal matter.
- The Yates Memo recognizes that “there may be instances where the company’s continued cooperation with respect to individuals will be necessary post-resolution. In these circumstances, the plea or settlement agreement should include a provision that requires the company to provide information about all culpable individuals and that is explicit enough so that a failure to provide the information results in specific consequences, such as stipulated penalties and/or a material breach.”
- Thus, like monitorships or “monitor-lite” obligations, post-resolution provisions envisioned in the Yates Memo will increase the total expense of resolving a criminal matter — a cost that may be substantial particularly if the cooperation involves production of documents and witnesses through trial against charged individuals.
7) The Yates Memo will decrease the already small number of resolutions in which individuals are granted immunity from criminal prosecution, and may further delay any resolution of criminal charges against a company.
- On its face, the Yates Memo will generally prohibit corporate resolutions that immunize individuals by requiring that, “absent extraordinary circumstances or approved departmental policy such as the Antitrust Division’s Corporate Leniency Policy, 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.” Moreover, “[a]ny such release of criminal or civil liability due to extraordinary circumstances must be personally approved in writing by the relevant Assistant Attorney General or United States Attorney.”
- The requirement to obtain approval from the relevant Assistant Attorney General or United States Attorney will, in practice and based on our experience, likely delay to a certain degree the ultimate approval of any resolution granting immunity to individuals under extraordinary circumstances. We note, however, that many corporate resolutions already do not absolve individuals of criminal liability
- The entry into a corporate resolution may be delayed, however, in order to provide for a plan to prosecute individuals. As Deputy Attorney General Yates remarked, “[i]f…DOJ attorneys decide it is necessary to resolve the corporate case first, they will only be permitted to do so once they have demonstrated a clear plan to their supervisors for resolving the related individual cases – promptly and before the statute of limitations expires.”
8) The DOJ may more frequently enter into tolling agreements to suspend suspensions the statute of limitations.
- As noted above, the Yates Memorandum addresses the DOJ's future use of tolling agreements and the standard applicable to obtaining them.
- Corporate criminal liability is frequently predicated on complex acts, transactions and events that occurred years before the company commences an internal investigation or the misconduct becomes known to law enforcement.
- Further, in today’s global economy, corporate criminal cases brought against large, multinational business enterprises will often involve acts, people, documents and data located outside the United States.
- If individuals are unwilling to resolve charges against them before the running of the applicable statute of limitation — with experience to date indicating a real likelihood of such unwillingness — then the DOJ will need to enter into tolling agreements or obtain the court orders to suspend the statue of limitations.
- We will continue to monitor the frequency of the DOJ to enter into such tolling agreements or obtain such court orders, particularly in light of the Yates Memo's "unavoidable and necessary" standard. We will also monitor any new DOJ practices in prosecuting individuals, in the filing and timing of criminal complaints, indictments and superseding indictments.
- The need for more time to gather more evidence is particularly acute in complex cases involving witnesses and documents that are overseas. We expect that the DOJ may more frequently apply to a court to suspend the statute of limitations for an offense in order to secure evidence located in non-US jurisdictions.
9) The Yates Memo’s goal of prosecuting individuals, which is not new in substance though is newly expressed in a formal written DOJ policy, may increase the prevalence of individual counsel and the costs of conducting internal investigations.
- The Yates Memo makes very clear to not only DOJ prosecutors, but individuals and their defense counsel, that the DOJ is targeting individuals.
- To the extent that the Yates Memo’s goal of prosecuting individuals will be followed by more prosecutors in more cases, the conflict between a company and its employees is exacerbated, or is better known to individual defendants, we would expect more individual defendants will retain individual defense counsel and do so earlier in an investigation.
- In turn, companies may be exposed to additional substantial costs and expenses if those companies are obligated in their bylaws or by contract to indemnify and advance reasonable legal expenses and costs to those individual defendants — a broad obligation that generally requires advancement of legal fees through exhaustion of all appeals.
- Directors, officers and in-house counsel should carefully review the company’s corporate advancement and indemnification rights to ensure that they are mandatory, automatically triggered, and provide a sufficient level of protection.
- Directors, officers and in-house counsel also should carefully review the company’s D&O insurance to ensure that there are adequate limits for the individuals, possibly augmenting the limits available to individuals through an increasingly popular stand-alone Side A/DIC policy, and to ensure that so-called “conduct exclusions,” which could preclude coverage for criminal or fraudulent misconduct, apply only if there is a final, non-appealable adjudication adverse to the individual in the underlying proceeding.
10) The Yates Memo’s focus on prosecuting individuals will highlight evolving employment law, ethical and privilege issues, especially in international investigations.
- As corporate internal investigations expectedly focus on individuals and their alleged misconduct, companies will confront thorny issues about how to treat US and non-US based employees who are the subjects of an investigation.
- Accordingly, clients should review their existing employment policies, and prepare a process that complies with all applicable US and non-US laws for dealing with employees who are under investigation.
- In addition, in-house and outside counsel should familiarize themselves with recent ethical rulings determining the propriety of dual representation of the company and an individual.
- Finally, the ability of the company or the individual to assert and maintain privilege in an investigation into or prosecution of corporate criminal conduct is a complex question that is exponentially more difficult to the extent it involves non-US jurisdictions with different rules governing the assertion of privilege, including its application to in-house counsel.
- For international corporate criminal investigations, companies and their in-house counsel should seek competent local (non-US) counsel to identify early in any investigation the potential privilege pitfalls and craft a legal strategy to minimize the risk of losing the ability to assert and control all applicable legal privileges.
11) The Yates Memo’s requirement that companies provide evidence implicating individuals will put a premium on complying with all applicable data privacy and related lawsbefore any investigation commences.
- Much of the evidence demonstrating an individual’s participation in and knowledge of a complex corporate or financial scheme will be in the form of electronically stored information (ESI), including emails and common user files, that may reside or be stored in non-US jurisdictions.
- Companies that will want to deliver such ESI and other personal information to the DOJ in order to obtain cooperation credit will not want to be precluded from doing so by the operation of local (non-US) data privacy and related laws.
- Companies and their in-house counsel therefore should now carefully review existing computer usage and information technology policies, employee acknowledgments of same and data transfer protocols to determine whether the company is currently in compliance with all applicable data privacy and related laws.
12) Ultimately, the Yates Memo clarifies the costs of cooperating but not the benefits of doing so, thereby potentially deterring companies from self-reporting to and cooperating with the DOJ.
- We remain concerned that the benefits of cooperation remain uncertain for boards of directors and General Counsel who are confronted with the challenging question of whether to self-report detected wrongdoing to the DOJ.
- As two of our partners explained at length, the decision to self-report a criminal act is complex; uncertainty as to the benefits of undertaking a substantial and expensive investigation, self-reporting and exposing the company to a criminal penalty with certainty diminishes the attractiveness of self-reporting misconduct.
- The Yates Memo identifies only the increased penalties and costs associated with cooperation, and does little to clarify the expected benefits from self-reporting to and cooperating fully with the DOJ.
- In addition, the Yates Memo undermines what the Antitrust Division rightly recognized to be a key component in incentivizing companies to participate in the Corporate Leniency Program: immunity for mid- to lower-executives.
- The DOJ appears to recognize and assume the risk that, because of the Yates Memo, corporations may be less inclined to cooperate, which “could mean fewer settlements and potentially smaller overall recoveries by the government,” and individuals may be more inclined “to roll the dice before a jury,” which could mean “fewer guilty pleas” for the DOJ.
- We are concerned that the Yates Memo imparts additional ambiguity into a self-reporting and cooperation calculus that already suffers from substantial uncertainty, thereby undermining recent efforts by DOJ attorneys to educate companies and their legal counsel as to the benefits of self-disclosing and cooperating with the DOJ
13) Prevention remains the best defense
- To avoid the expenses and distractions potentially caused by the Yates Memo (see supra), clients should proactively review and monitor on a regular basis the sufficiency of their compliance programs to prevent, detect, and respond to illegal conduct such as bribery, collusion, money laundering and fraud.
- Further, the recent establishment of the DOJ FCPA compliance expert position to vet corporate compliance programs magnifies the importance of companies establishing and maintaining an effective compliance program before detecting and possibly self-reporting any criminal conduct.
- The Yates Memo, and other recent changes at the DOJ therefore provide further incentive for companies to design, adopt and implement sound corporate compliance programs, particularly for multinational business enterprises with thousands of employees, many business partners and extensive international business operations including in markets with challenging compliance cultures and environments.
As Deputy Attorney General Yates observed, “[o]nly time will tell” the real impact of the Yates Memo’s new guidelines on internal investigations and corporate criminal resolutions. The Yates Memo may not materially change existing DOJ enforcement practices in that the DOJ currently seeks to prosecute individuals. However, the sharper tone on individual prosecutions and binary nature of cooperation credit established under the Yates Memo may exacerbate the tension faced by in-house counsel who in a modern business enterprise fulfill multiple roles, and may disproportionately emphasize obtaining evidence against individuals which will increase the duration and expense of internal investigations. The Yates Memo’s directives to DOJ civil attorneys and emphasis on companies’ continuing cooperation post-plea and post-settlement may increase for both companies and individuals the total length of time required to resolve all criminal and civil claims arising from underlying illegal activities. Other aspects of the Yates Memo will implicate thorny employment law, ethical, privilege and privacy issues, especially in international investigations. At bottom, the Yates Memo offers too few “carrots” and too many “sticks” to directors, General Counsel and senior corporate leadership who reasonably and in good faith are trying to decide whether to voluntarily report to and cooperate with the DOJ.