A prior alert outlined how the U.S. Department of Justice [“DOJ”] announced - in what has been deemed the "Yates memo" - its new strategy to hold individuals, as well as corporations, accountable for civil and criminal wrongdoing. The DOJ now has formally incorporated this policy into its written guidelines to govern the handling of investigations and prosecutions. These guidelines broaden the scope and timeliness of information a company under investigation is expected to provide before the government will afford “cooperation credit.”
The DOJ’s new rule setting forth what corporations must do to earn “cooperation credit” is the guidelines’ most important feature. Deputy Attorney General (DAG) Sally Yates emphasized that now, “if a company wants credit for cooperating it must provide all non-privileged information about individual wrongdoing.” Companies still can protect attorney-client privileged information from disclosure, but must produce all relevant facts – including those learned through interviews with counsel – unless identical information already has been provided. This change requires companies which want that benefit to complete timely investigations, which are appropriately thorough and independent, and report to the government all relevant facts about all individuals involved, no matter where they fall in the corporate hierarchy.
DAG Yates also stressed the importance of corporate compliance professionals as “crucial partners” to combat white-collar crime. To this end, the DOJ has hired its first Compliance Counsel to assess compliance programs and remediation efforts of companies under investigation. The DOJ’s new focus on compliance means that companies must resolve to hire and to fully utilize such professionals to impose rigorous internal controls to self-assess and self-correct misconduct.
Going forward, corporate management should expect that, in the event of misconduct, any DOJ investigation will focus on a company’s compliance efforts, and the absence of meaningful compliance will have a direct, negative impact on the company’s “bottom line.”