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Understanding the Yates Memo

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Since 1999, the U.S. Department of Justice (DOJ) has made a series of policy changes to direct federal prosecutors to bring charges against individuals responsible for corporate wrongdoing. And, in late 2015, Deputy Attorney General Sally Yates issued a memorandum to federal prosecutors—commonly known as the Yates Memo—that further emphasizes the accountability of individuals.

The Yates Memo consists of six “key steps” to encourage businesses to focus on individual accountability as well as to encourage federal attorneys to bring civil and criminal charges against culpable employees. To protect your business and co-workers, it’s important to know these steps and how they may impact you.

Major Policy Changes

Of the six key steps that the Yates Memo introduced, two are seen as major changes to the DOJ’s policies:

  1. Businesses must now identify all individuals involved in corporate wrongdoing to qualify for any cooperation credit in the resolution of a matter. Although businesses were previously encouraged to identify individuals to receive credit, under the Yates Memo, it is now considered a “threshold requirement.”

The DOJ also states that it is possible for a business’s internal investigation to find no individuals involved in wrongdoing. However, the agency believes that these scenarios will be rare if an investigation is appropriately thorough.

  1. The DOJ is directing federal prosecutors to consider bringing both criminal and civil cases against individuals at the beginning of all investigations. Although this does not appear to be a major policy change, it directs attorneys to focus on individuals during the onset of an investigation and to not focus solely on the business as a whole.

Additional Changes

The remainder of the key steps serve to underscore the importance of individual accountability and to enable both civil and criminal penalties:

  1. Resolutions between businesses and the DOJ will provide no protection for culpable individuals, except in “extraordinary circumstances.” While these resolutions often included some form of protection for individuals, federal prosecutors will now also pursue them separately.
  2. Corporate cases should not be resolved before there is a plan to also resolve any related cases involving culpable individuals. This may have the effect of lengthening investigations, as businesses will be expected to cooperate with individual cases as well.
  3. Civil attorneys should focus on all individuals involved in corporate wrongdoing, regardless of their ability to pay financial penalties. Federal prosecutors are now being encouraged to consider the value of general deterrence and individual punishment when bringing civil cases.
  4. Criminal and civil attorneys should cooperate during investigations. Although this is generally standard practice, the U.S. Attorney’s Manual (USAM) now requires civil attorneys to follow criminal guidelines when investigating individuals.

How Can it Impact You?

The Yates Memo will likely introduce fundamental changes to how businesses conduct internal investigations and communicate with employees. For example, employees may be hesitant to volunteer information during internal investigations, and may even request their own legal counsel to represent their interests.

For help determining how the Yates Memo will impact you, contact D’Camera Group, LLC today. Our team can provide you with comprehensive directors and officers resources and insurance policies to protect your best interests.