DOJ Invigorates Push for “Individual Accountability” in Corporate Investigations
In what amounts to a significant change of emphasis for corporate criminal and civil investigations, the United States Department of Justice (“DOJ”) has announced important new investigation and prosecution policies designed to “combat corporate misconduct… by seeking accountability from the individual who perpetrated the wrongdoing.” DOJ’s new policies prioritize the prosecution of individuals (not just companies) and place pressure on corporations to share evidence against individuals with the government. DOJ is now required to “fully leverage its resources to identify culpable individuals at all levels” in cases against corporations.
Deputy Attorney General Sally Quillian Yates announced the new policies in a memorandum titled “Individual Accountability for Corporate Wrongdoing” last week. The enhanced investigation and enforcement policies require prosecutors to “proactively investigat[e] individuals at every step of the process — before, during, and after any corporate cooperation” and “maximize the chances” that any final resolution of an investigation “will include civil or criminal charges” against such individuals.
The memo sets forth six specific steps prosecutors will take in all pending DOJ cases, as practicable, and new investigations to hold individual corporate wrongdoers accountable:
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To be eligible for any cooperation credit, corporations must provide DOJ all relevant facts about the individuals involved in corporate misconduct — regardless of their position, status, or seniority.
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Investigations must focus on individuals from the inception of an investigation, regardless of whether the investigation begins civilly or criminally.
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Criminal prosecutors and civil attorneys handling corporate investigations must engage in early and regular contact with one another to identify circumstances where concurrent criminal and civil investigations should be pursued.
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Absent extraordinary circumstances, no corporate resolution (e.g., deferred prosecution agreement, plea agreement, or non-prosecution agreement) will provide protection for any individuals responsible in the corporate wrongdoing.
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Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires, and declinations of prosecution as to individuals in such cases must be memorialized and approved.
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Civil attorneys must evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay damages, or fines, such as whether the person’s misconduct was serious, actionable, and whether the evidence is admissible.
This shift in approach places immense pressure on companies to point fingers and throw individuals responsible for corporate misconduct “under the bus.” Although the practical impact of the memo is yet to unfold, companies should expect:
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increased probing of the scope and substance of information provided by them in cooperation with an investigation into corporate wrongdoing;
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increased scrutiny of the company’s structuring of and conduct during internal investigations; and
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an increase in the number and frequency of parallel proceedings;
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prolonged investigations and negotiations due to the (i) complexity of DOJ’s intended coordination across both the civil and criminal divisions and (ii) dual focus on individuals and the corporate entity.
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