Last week, the Department of Justice issued a directive to all U.S. Attorneys to prioritize the prosecution of individuals in corporate investigations. In the past, corporations have agreed to pay large fines in the hope of avoiding prosecution of its officers and employees. However, the September 9, 2015, memo by Deputy Attorney General Sally Quinlan Yates, written in response to criticism for failure to prosecute individuals in the Wall Street financial crisis, expressly takes aim at prosecuting officers, directors and high level individuals who are responsible for “corporate misdeeds.” In an interview with the New York Times, Yates said, “Corporations can only commit crimes through flesh-and-blood people,” and therefore, “It’s only fair that the people who are responsible for committing those crimes be held accountable.” Having seen similar types of initiatives during my 21 years as a white collar crime prosecutor, in particular my prosecutions of officers of banks and savings and loans, companies need to be alerted to the shift in focus of corporate investigations.
Individuals in the C Suite need to know what steps corporate officers can take to avoid being prosecuted. The oil and gas industry is already subject to increased criminal focus after the Macondo incident where it appears that every INC is reviewed for possible criminal enforcement. The Yates memo, titled “Individual Accountability for Corporate Wrongdoing,” adds yet another layer of scrutiny to regulatory violations and investigations with the goal being criminal prosecution of individuals.
For further information you can find the Department of Justice memo here:
and a New York Times article discussing the memo here: