January 25, 2022

Volume XII, Number 25

Advertisement
Advertisement

January 24, 2022

Subscribe to Latest Legal News and Analysis

Turning Back the Clock on Corporate Individual Accountability: DOJ Announces ‘Revisions’ to Corporate Prosecution Policies

On Oct. 28, 2021, Deputy Attorney General Lisa Monaco announced that the Department of Justice (DOJ) was instituting certain changes to its policy on prosecuting corporate entities. It is unclear what these changes, which are discussed below, will mean in practice, but they signal that the DOJ is focused on corporate criminal liability and individual accountability. DOJ investigations will continue to be extensive, and companies should consider having in place a robust compliance program in the event of a government inquiry and enforcement action.

The DOJ policy changes were announced in remarks made by Deputy Attorney General Monaco to the 2021 ABA White Collar Conference and accompanied by a written memorandum to all DOJ employees. According to the written memorandum:

  • In considering how to resolve an investigation, the DOJ will “consider a corporation’s entire criminal history.”

  • To receive cooperation credit, a corporation must “provide all information concerning all persons involved in corporate misconduct.”

  • Consideration of “monitors” will be the practice, as opposed to the exception, in corporate resolutions.

First, with regard to the DOJ’s consideration of a corporation’s history of misconduct, the memorandum directs that prosecutors must consider all “misconduct by the corporation discovered during any prior domestic or foreign criminal, civil, or regulatory enforcement actions against it, including any such actions against the target company’s parent, divisions, affiliates, subsidiaries, and other entities within the corporate family.” In her remarks, Deputy Attorney General Monaco explained further by noting that such prior misconduct “speaks directly to a company’s overall commitment to compliance programs and the appropriate culture to disincentive criminal activity.” Notably, the prior misconduct need not relate to the instant investigation or charges.

Second, concerning a company’s provision of information on individuals in corporate investigations, the memorandum is a return to prior DOJ policy. The memorandum states “that to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct,” reinstating that factor from former Deputy Attorney General Sally Yates’s 2015 Memorandum addressing “Individual Accountability for Corporate Wrongdoing.” In 2018, former Deputy Attorney General Rod Rosenstein had announced a revision to the 2015 guidance, focusing instead on those individuals that were “substantially involved” in misconduct. Now, according to the new memorandum and the deputy attorney general’s remarks, “companies cannot limit disclosure to those individuals believed to be only substantially involved in the criminal conduct,” but must identify “all individuals involved in or responsible for the misconduct at issue, regardless of their position, status, or seniority, and provide to the Department all nonprivileged information relating to that misconduct.”

Finally, in connection with the use of monitors, the new DOJ policy is that the “Department should favor the imposition of a monitor where there is a demonstrated need for, and clear benefit to be derived from, a monitorship.” Prior to this, and pursuant to 2018 Criminal Division guidance, monitors were viewed generally as the exception and not the rule. In her remarks, the deputy attorney general made clear this will no longer be the case and that the DOJ is “free to require the imposition of independent monitors whenever it is appropriate to do so in order to satisfy our prosecutors that a company is living up to its compliance and disclosure obligations under” a deferred prosecution agreement or non-prosecution agreement.

It will take some time to measure the effect these changes in DOJ policy will have. But there are some immediate considerations for practitioners and companies, as stated below.

Key Takeaways

  1. Any internal investigation must account for these DOJ changes. A company should not only investigate wrongdoing thoroughly but also account for and identify prior misconduct of the company—and its related entities—as that prior misconduct will now affect any potential DOJ resolution.

  2. Companies need to ferret out all instances of individual misconduct and understand each individual’s role in the conduct at issue.

  3. To mitigate the risk of monitor imposition, companies may wish to focus not only on remediating past misconduct but also—pursuant to Deputy Attorney General Monaco’s new memorandum—on demonstrating to DOJ that the company’s compliance program is “tested, effective, adequately resourced, and fully implemented at the time of resolution.” As in the past, the thoroughness of an internal investigation, and the maintenance of credibility and trust with the DOJ during the investigation, could have a substantial impact on whether a monitor is required.

 

©2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XI, Number 306
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Nathan J. Muyskens Greenberg Traurig  DC Global White Collar Criminal Defense Practice Foreign Corrupt Practices Act
Shareholder

Nathan J. Muyskens is Co-Chair of the Global White Collar Criminal Defense Practice and defends corporate and individual clients in criminal grand jury investigations and prosecutions, internal investigations, regulatory inquiries and enforcement matters, and related parallel civil proceedings. Nate defends companies in corruption investigations and other matters related to the Foreign Corrupt Practices Act, and has experience handling government antitrust investigations on behalf of companies in various industries, such as health care, air travel, defense, pharmaceuticals, energy,...

1 202.331.3164
Jared E. Dwyer White Collar Criminal Attorney Greenberg Traurig Miami, FL
Shareholder

Jed Dwyer focuses his practice on white collar criminal matters, criminal and civil tax litigation, and other complex civil litigation. Jed has tried more than 40 jury and non-jury trials and has been involved in over 100 investigations and prosecutions, many of which included complex fraud and regulatory matters. Jed leverages his experience to represent individuals and organizations in investigations and other proceedings concerning tax fraud, money laundering, public corruption, complex international financial crime, financial institution fraud, and violations of the Bank Secrecy Act,...

305-579-0564
Benjamin G. Greenberg White Collar Defense Attorney Greenberg Traurig Miami, FL
Shareholder

Benjamin G. Greenberg is the former U.S. Attorney for the Southern District of Florida. Ben counsels corporations and individuals on white collar matters and an array of regulatory issues, as well as advising them in connection with investigations and compliance. He utilizes his experience to help clients navigate local and national issues involving the Department of Justice. Ben is an experienced trial attorney who has tried more than twenty cases to verdict. He has in-depth experience handling a wide range of government investigations, including the Foreign Corrupt Practices Act (FCPA),...

305-579-0850
John Huber Salt Lake City Litigation Attorney Shareholder Greenberg Traurig, LLP
Shareholder

John Huber is a veteran trial attorney and statured leader in his field with over 26 years of litigation experience handling numerous trials at every level of state and federal court. Having served as the U.S. Attorney for the District of Utah from 2015-2021, John was the longest-tenured active U.S. Attorney in the United States. First nominated by President Obama and later re-nominated by President Trump, he was unanimously confirmed by the U.S. Senate both times. John focuses his practice on complex investigations and litigation of white-collar fraud, internal...

801-478-6915
David I. Miller White Collar Litigation Attorney Greenberg Traurig New York, NY
Shareholder

David I. Miller, an experienced trial lawyer and former federal prosecutor, focuses his practice on white collar criminal defense, government and internal investigations, securities and commodities enforcement, related complex civil litigation, and cryptocurrency, cybersecurity, anti-money laundering, and national security matters. Previously, David served for five years as an Assistant U.S. Attorney in the Southern District of New York (S.D.N.Y.), over half that time as a member of the Securities and Commodities Fraud Task Force. He also served as a terrorism prosecutor with the...

212.801.9205
Advertisement
Advertisement
Advertisement