DOJ to Focus on Executives in Corporate Investigations
?The U.S. Department of Justice (DOJ) will prioritize prosecuting individual employees and will�pressure corporations to provide evidence to agents against their executives, according to a new memo released by the department yesterday.�
In a major shift, DOJ civil and criminal investigators will now�focus on individual employees from the beginning of their investigations into corporate wrongdoing.This marks a change from previous DOJ policy, which focused on investigating companies themselves and not going after individuals involved in the wrongdoing�until a corporate settlement had been reached.
The memo�also clarifies that, effective immediately, if a company wants credit for cooperating in a DOJ investigation, it must identify all individuals involved in the wrongdoing �regardless of their position, status, or seniority in the company.� Companies must also provide all relevant facts of these individuals' misconduct.
�It�s all or nothing. No more picking and choosing what gets disclosed,� said Deputy Attorney General Sally Quillan Yates in anappearance at New York University�s Law School today to discuss the memo. �No more partial credit for cooperation that doesn�t include information about individuals.�
Yates wrote the memo and explained in her appearance that it is the DOJ�s obligation to �ensure that we are holding lawbreakers accountable regardless of whether they commit their crimes on the street corner or in the boardroom. In the white-collar context, that means pursuing not just corporate entities, but also the individuals through which these corporations act.�
There are considerable challenges associated with identifying individuals within corporations that had knowledge or the criminal intent to commit wrongdoing, but Yates said it is the DOJ�s responsibility to overcome these and �do everything we can to develop the evidence and bring these cases.��
�The public expects and demands this accountability,� she added. �Americans should never believe, even incorrectly, that one�s criminal activity will go unpunished simply because it was committed on behalf of a corporation.�
To carry out this new policy, the DOJ is making other changes within the department, including revising several guidance documents that its attorneys rely on when investigating corporations; changing�how it initiates and develops corporate investigations; directing civil and criminal attorneys to collaborate to the full extent permitted by law; changing how it resolves cases; and broadening the focus of its civil enforcement strategy.�
�While some of our civil litigators have routinely pursued individuals, others have not�primarily because they have focused on the likelihood of financial recovery from their investigative targets,� Yates explained about the final change in policy. �This was an understandable practice�but it naturally prioritized large-scale corporate investigations over civil enforcement actions against the individuals who perpetuated the wrongdoing.�
The effort to focus on executives as opposed to corporations�marks the first major policy change under Attorney General Loretta Lynch since she took office in April. The change comes after years of increased criticism of the perceived lack of punishment for executives involved in the housing crisis and other recent cases of corporate misconduct.