On November 29, 2018, Deputy Attorney General Rod Rosenstein announced revisions to the Department of Justice (“DOJ”) policy on individual accountability for corporate wrongdoing, which was originally announced in the Yates Memo of September 2015. U.S. DOJ, Remarks at the American Conference Institute's 35th International Conference on the Foreign Corrupt Practices Act. In response to concerns that the policy could lead to wasted resources and impede resolutions, Mr. Rosenstein announced that the revised policy requires that companies identify all individuals who were substantially involved in a potential crime in order for companies to receive cooperation credit in criminal investigations; the policy established in the Yates Memo, on the other hand, required companies to provide information on all individuals who were involved in potential misconduct, no matter how insubstantial their role.

On September 9, 2015, the DOJ released, under the signature of then-Deputy Attorney General Sally Yates, a memo that expounded on its position vis a vis cooperation credit for corporations. That memo, titled “Individual Accountability for Corporate Wrongdoing,” stated that “[t]o be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct.” This policy was subsequently incorporated into the United States Attorney’s Manual, which guides investigations undertaken by Main Justice and U.S. Attorneys. With Mr. Rosenstein’s announcement, companies looking to obtain cooperation credit will now be required to provide the DOJ with facts relating only to those individuals who were “substantially” involved in wrongdoing. In justifying this policy shift, Mr. Rosenstein indicated a desire to focus on individuals who play “significant roles in setting a company on a course of criminal conduct” and that the DOJ wants to “know who authorized the misconduct, and what they knew about it.” Mr. Rosenstein also acknowledged that it is not practical to require the company to identify every employee who played any role in alleged illegal schemes that encompass otherwise routine activities of numerous employees, particularly when the government and company want to resolve the matter but disagree over the scope of misconduct.

Most notably, this policy shift limits the scope of information a company is required to provide in order to receive cooperation credit and reduced fines. Companies can now determine which individuals were substantially involved in wrongdoing, rather than providing the DOJ with information on every individual involved, no matter the level of involvement (although, of course, the government will have to agree with where the company draws the line on which employees were “substantially” involved). That being said, the policy shift may not impact the scope of internal investigations conducted by companies in response to government investigations, as there are still ample incentives for the company to understand the full breadth and scope of alleged misconduct. Indeed, a full understanding of the scope and facts underpinning potential misconduct will likely be necessary to effectively determine which individuals were “substantially” involved and which individuals were not. Furthermore, the revised policy conflicts with the DOJ’s FCPA Corporate Enforcement Policy, which still requires the disclosure of “all relevant facts about all individuals involved.” As FCPA investigations are often among the most sprawling and expensive of white collar investigations, this conflict will likely be a discussion point between the defense bar and the DOJ in the context of ongoing FCPA investigations.

In re Signet Jewelers Limited Sec. Litig. 

Rosenstein Remarks at the American Conference Institute's 35th International Conference on the Foreign Corrupt Practices Act