On 9 September 2015 the Deputy Attorney General Sally Quillian Yates of the U.S. Department of Justice (DOJ) issued a Memorandum in which the DOJ formulated its (revised) policy regarding ‘Individual Accountability for Corporate Wrongdoing’ (www.justice.gov). The Memorandum describes six ‘steps’ that both federal criminal prosecutors and civil attorneys must take in criminal and civil proceedings when investigating corporate fraud and other misconduct. More specifically, the Memorandum recognises that although individuals are (obviously) involved when cases of corporate misconduct occur, it is often difficult to identify the individuals concerned and establish the level of their culpability. At the same time, identifying those individuals and ascertaining their culpability is essential in fighting corporate misconduct. The six steps described in the Memorandum are meant to give guidance to federal criminal prosecutors and civil attorneys to properly address the role of individuals in corporate misconduct and be able to hold them to account. More specifically, the Memorandum deals with the situation in which criminal and civil investigations lead to negotiated settlements (a plea or a settlement agreement) between the DOJ and the company that is under investigation. In the Memorandum, each of the six steps is accompanied by short explanatory remarks. The steps are:
- 'To be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct.’ This step requires ‘full cooperation’ of a company that is under investigation in order ‘to be eligible for any credit for cooperation’. Companies must identify all persons responsible for the corporate misconduct as well as provide all facts relevant to the case.
- 'Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation.’ Federal criminal prosecutors and civil attorneys should look into the role of individuals from the very beginning of their investigations.
- 'Criminal and civil attorneys handling corporate investigations should be in routine communication with one another.’ Communication between federal criminal prosecutors and civil attorneys is essential for the enforcement by the DOJ of criminal and civil laws.
- 'Absent extraordinary circumstances, no corporate resolution will provide protection from criminal or civil liability for any individuals.’ A negotiated settlement between the DOJ and a company that is under investigation should not include a release of claims against individuals.
- '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.’
- '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.’ Civil attorneys should inter alia take into account whether civil actions should be brought against individuals who are unable to pay compensation, but should not solely be motivated by this argument.