The U.S. Department of Justice has announced that it is changing its policies for awarding “cooperation credit” to companies involved in either civil or criminal investigations.
In 2015, the DOJ issued a policy memo — “Individual Accountability for Corporate Wrongdoing” authored by then-Deputy Attorney General Sally Yates — that laid out six steps for DOJ prosecutors to strengthen their pursuit of executives for corporate wrongdoing:
- To receive any consideration for cooperation from the DOJ, companies must identify all individuals involved in corporate misconduct and provide all relevant facts about their involvement.
- Prosecutors must focus on individuals from the beginning of any investigation.
- Absent any extraordinary circumstances and other than in antitrust cases, no corporate resolution will provide protection to individuals for civil or criminal liability.
- No corporate case may be resolved without a clear plan for the resolution of related individual cases, and any waiver of individual prosecution must be approved by a high-level DOJ official.
- Routine communication between prosecutors and civil attorneys pursuing corporate investigations is expected.
- Civil attorneys should focus on individuals as well as a company and any decision on whether or not to file suit against an individual should be based on considerations beyond that individual’s ability to pay civil fines.
Now, the DOJ has added the word “substantially” so that Step 1 is changed to, “identify all individuals substantially involved in corporate misconduct and provide all relevant facts about their involvement.”
On the civil side, a sliding scale has been implemented to give companies credit that is in proportion to how much they cooperate. Companies will receive maximum credit for identifying “every individual who was substantially involved in or responsible for the misconduct.” Companies will not receive any cooperation credit if they fail to identify senior officers or directors who commit wrongdoing.
Prior to the 2015 policy memo, the DOJ typically did not prosecute corporations that cooperated fully with its investigations. The DOJ said the changes to the 2015 policy memo reflect a return to giving prosecutors more discretion and to avoid penalizing innocent shareholders and employees.
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