On September 9, 2015, Deputy Attorney General Sally Yates issued a memorandum to all 93 United States Attorneys across the country advising that corporate investigations shall begin with a focus on individual misconduct and build out to the larger corporate misconduct.
In combatting corporate misconduct by seeking accountability from the individuals who perpetrated the wrongdoing, the memorandum identifies four (4) important reasons:
1. It deters future illegal activity;
2. It incentivizes change in corporate behavior;
3. It ensures that the proper parties are held responsible for their actions; and
4. It promotes the public's confidence in our justice system.
The memorandum further identifies the following six (6) keys to strengthen the Government's pursuit of individual corporate wrongdoing.
1. In order to qualify for any cooperation credit, corporations must provide to the Government all relevant facts relating to the individuals responsible for the misconduct
The company must identify all individuals responsible and/or involved in the misconduct, regardless of their position within the company, their status or seniority. Further, the company must provide the Government all facts relating to the misconduct, and after meeting this threshold requirement, will then be eligible for consideration of cooperation credit.
2. Criminal and civil corporate investigations should focus on individuals from the inception of the investigation
Multiple goals can be accomplished by focusing on individual wrongdoers from investigation inception:
· Maximizing ability to ferret out the full extent of corporate misconduct;
· Increase the likelihood that individuals with knowledge of the corporate misconduct will cooperate with the investigation and provide information against individuals higher up the corporate hierarchy; and
· Maximize chances that the investigation will result in a resolution of civil and criminal charges against both individuals and the corporation.
3. Criminal and civil attorneys handling corporate investigations should be in routine communication with one another;
Communication between criminal, civil, and agency attorneys will permit consideration of the full range of potential Government remedies including but not limited to:
· Victim Restitution;
· Asset Seizure;
· Civil Forfeiture;
· Criminal Forfeiture;
· Suspension; and
4. Absent extraordinary circumstances or approved departmental policy, the Government will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation;
As a result of the Government's new placed importance of holding the responsible individuals accountable, absent extraordinary circumstances or approved departmental policy, Government lawyers shall not agree to a resolution with the corporation that includes an agreement to dismiss or provide immunity for individual officers or employees.
5. Government attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and
Following an investigation, the reasons to not bring criminal charges and/or civil claims against individuals who committed misconduct must memorialized and approved by the United States Attorney or Assistant Attorney General whose office handled the investigation.
6. Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual's ability to pay.
The Government's civil enforcement efforts have two (2) equally important objectives - to return Government money to the public and to hold the wrongdoers accountable / deter future wrongdoing.
Civil actions should not be governed solely by an individuals' ability to pay, rather Government attorneys should consider factors such as:
· The seriousness of the individual's misconduct;
· Whether the action can be taken against the individual as a result of their conduct;
· Whether admissible evidence will probably be sufficient to obtain and sustain a judgment; and
· Whether pursuing the action reflects an important federal interest.
The Government's policy change makes clear that every corporate employee of an entity under Government investigation should immediately consult with an experienced attorney to ensure that their individual rights are being protected.
If you or someone you care about has any questions regarding individual liability in connection with corporate investigations, please contact Attorney Michael C. Hennenberg to schedule a consultation.