DOJ Issues Memorandum Reinforcing Intention to Pursue Individuals for Corporate Wrongdoing


Last week, the U.S. Department of Justice issued an important memorandum reinforcing its intention to pursue individuals for corporate wrongdoing and announcing new steps it is pursuing in this effort. 

Although the Department has had a stated focus on individuals in recent years, the new memorandum reflects several policy changes that are especially important for corporate executives and other employees who could find themselves involved in internal or government investigations. 

The memorandum, issued by Deputy Attorney General Sally Quillian Yates, explains at the outset that “[o]ne of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.”  This accountability “deters future illegal activity, it incentivizes changes in corporate behavior, it ensures that the proper parties are held responsible for their actions, and it promotes the public’s confidence in our justice system.”  The memorandum then lays out the following guidance on “individual corporate wrongdoing”:

 (1)    corporations seeking cooperation credit “must provide” to the department “all relevant facts relating to the individuals responsible for the misconduct”;

(2)    civil and criminal investigations of corporations “should focus on individuals from the inception of the investigation”;

(3)    civil and criminal department attorneys involved in corporate investigations “should be in routine communication with one another”;

(4)    department attorneys must not “release culpable individuals from civil or criminal liability” absent “extraordinary circumstances or approved departmental policy”;

(5)    department attorneys should not resolve corporate investigations “without a clear plan to resolve related individual cases”; and

(6)    civil attorneys “should consistently focus on individuals” and “evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.”

The memorandum also notes that key departmental guidelines, notably the United States Attorney’s Manual, will be updated to reflect the new guidance.

The memorandum is significant because it makes clear that corporations cannot receive cooperation credit unless they provide the government with substantial information about all individuals who may have been involved in the alleged corporate wrongdoing.  Thus, corporations’ ability to steer investigations towards certain wrongdoers — or away from others — may be circumscribed.  Similarly, the memorandum strongly prohibits any sort of corporate resolution that “includes an agreement to dismiss charges against, or provide immunity for, individual officers or employees.” 

The Department’s memorandum warrants caution on the part of corporations and corporate executives and employees.  Corporations will need to be candid with the government during investigations, and may have little influence on how the government selects its targets in any such investigation.  Corporate counsel should encourage individuals who may face scrutiny to retain independent counsel, since such encouragement is both fair and can often facilitate cooperation.    

SKV regularly represents corporations and individuals in internal investigations, government investigations, and government prosecutions.  If you have any questions, please contact Dane Ball or David Isaak.


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