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The DOJ recently made a significant change to its policy
regarding corporate cooperation. Since 2015, that policy has been
governed by a memo titled "Individual Accountability for
Corporate Wrongdoing" — popularly known as the
"Yates Memo" — which stated that "[t]o be
eligible for any cooperation credit, corporations must provide to
the Department all relevant facts about the individuals involved in
corporate misconduct." This policy was incorporated into the
United States Attorney's Manual, which guides DOJ
investigations.
On 29 November 2018, Deputy Attorney General Rod Rosenstein
announced revisions to the Yates Memo policy. Under the revised
policy, companies are only required to identify all individuals who
were substantially involved in a potential crime in order to
receive cooperation credit in criminal investigations. This is a
significant change to the Yates Memo policy, which required
companies to provide information on all individuals who were
involved in potential misconduct, no matter how insubstantial their
role.
In explaining the DOJ's policy shift, Mr. Rosenstein
indicated a desire to focus on individuals who play
"significant roles in setting a company on a course of
criminal conduct" and that the DOJ wants to "know who
authorized the misconduct, and what they knew about it." Mr.
Rosenstein acknowledged that it is not practical to require a
company to identify every employee who played any role in alleged
illegal schemes that encompass otherwise routine activities of
numerous employees, particularly when the government and company
want to resolve the matter, but disagree over the scope of
misconduct.
Under the revised Yates Memo policy, companies can now determine
which individuals were substantially involved in wrongdoing, rather
than providing the DOJ with information on every individual
involved, no matter the level of involvement (although, of course,
the government will have to agree with where the company draws the
line on which employees were "substantially" involved).
That being said, the policy shift may not impact the scope of
internal investigations conducted by companies in response to
government investigations, as there are still ample incentives for
the company to understand the full breadth and scope of alleged
misconduct. Indeed, a full understanding of the scope and facts
underpinning potential misconduct will likely be necessary to
effectively determine which individuals were
"substantially" involved and which individuals were not.
Furthermore, the revised Yates Memo policy conflicts with the FCPA
Corporate Enforcement Policy, which still requires the disclosure
of "all relevant facts about all individuals involved."
As FCPA investigations are often among the most sprawling and
expensive of white collar investigations, this conflict will likely
be a discussion point between the defense bar and the DOJ in the
context of ongoing FCPA investigations.
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