United States: Six Guidelines For Understanding The Yates Memo

Much ink already has been spilt on the September 9, 2015 Department of Justice policy memorandum signed by Deputy Attorney General Sally Yates. The Yates Memo signaled a shift in the DOJ's approach to prosecution of white-collar crime towards an increased focus on pursuing individual executives and employees for corporate wrongs. 

To this end, the Yates Memo set forth six guiding principles for DOJ attorneys to follow. 

  1. To be eligible for any cooperation credit, corporations must provide to the DOJ all relevant facts about the individuals involved in the corporate misconduct. 
  2. Both criminal and civil DOJ corporate investigations should focus on individuals from the inception of the investigation. 
  3. Criminal and civil DOJ attorneys handling corporate investigations should be in routine communication with one another. 
  4. Absent extraordinary circumstances, no corporate resolution will provide protection from criminal or civil liability for any individuals. 
  5. Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires, and declinations as to individuals in such cases must be memorialized. 
  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. 

While the Yates memo identified these guiding principles, it did not provide any details as to how they would be implemented or what effect they would have. This led to much speculation in the business and legal community. Would the Yates Memo lead to a real change in DOJ practices or would it prove to be largely symbolic? Would it lead to a decrease in corporate cooperation with the DOJ? Would it have a chilling effect on employee cooperation in internal investigations? What would it mean for companies in practice?

Last month, Deputy Attorney General Yates attempted to provide some clarity to these questions in a speech at the American Bar Association Money Laundering Conference in Washington, D.C. From the Deputy Attorney General's remarks emerged a number of important points (we'll break them into six for symmetry's sake) that senior corporate officers, in-house counsel, and outside counsel would do well to keep in mind. 

  1. The DOJ has revised the U.S. Attorney's Manual to implement the policies set forth in the Yates Memo to ensure that its attorneys take concrete steps to increase prosecution of individuals for corporate wrongdoing. 
  2. The DOJ appears to be serious when it says that, if a company wants any credit whatsoever for cooperating, it will need to provide the DOJ with all non-privileged information about individual wrongdoing. 
  3. The DOJ will respect the attorney-client privilege, but will expect that the company turn over all facts, which are not protected, regarding individual wrongdoing. In other words, the company may not have to turn over that witness interview summary its counsel drafted during an internal investigation, but DOJ will require the company to disclose every relevant fact recorded in the summary. 
  4. A company should approach the DOJ early, even if it does not yet have all the facts about the wrongdoing or the individuals involved. 
  5. DOJ civil attorneys from now on will be approaching the decision whether to pursue an individual based on the same principles that guide DOJ criminal attorneys in deciding whether to prosecute. This means that DOJ civil attorneys may pursue individuals for corporate wrongdoing, even if those individuals are judgment proof. 
  6. The DOJ intends to make good on its policy change to hold more individuals accountable for corporate wrongdoing, even if that leads to less corporate cooperation and fewer corporate settlements. 

There, of course, remain many open questions about what the Yates Memo ultimately will mean for companies and their counsel. It appears, however, that the DOJ is both publicly signaling a shift in policy and implementing measures internally to effect real change in its approach to prosecuting corporate crime. It will be important for corporate counsel to pay close attention to DOJ practices in the coming months and years.  It also will be critical for companies to seek the guidance of experienced counsel at the earliest sign of trouble. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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