On April 30, 2019, the U.S. Department of Justice (“DOJ”) issued the most comprehensive guidance that the DOJ has provided on how prosecutors should evaluate corporate compliance programs (“Policy”). In a speech announcing the Policy, Assistant Attorney General for the Criminal Division, Brian A. Benczkowski expressed the DOJ’s desire “to provide additional transparency” to companies in designing and implementing compliance programs.
With the change of presidential administrations in January 2017, it was expected that the priorities of the U. S. Department of Justice (DOJ) would shift away from white-collar crime enforcement and towards immigration, violent crime, and narcotics enforcement. But recent data actually show a significant uptick in both prosecutions and convictions of individuals by the DOJ Criminal Division’s Fraud Section in 2018 over the previous two years. Moreover, the amount of money the DOJ recovered from companies through Deferred Prosecution Agreements (DPAs) or Non-Prosecution Agreements (NPAs) skyrocketed in 2018 .
On November 29, 2018, Deputy Attorney General Rod J. Rosenstein announced the Department of Justice’s (DOJ) much-anticipated revisions to the September 2015 Memorandum on “Individual Accountability for Corporate Wrongdoing,” commonly known as the “Yates Memo” and named for Rosenstein’s predecessor, Sally Q. Yates. The Yates Memo emphasized the importance of holding individuals accountable for corporate misconduct, and set forth principles for DOJ prosecutors to follow in determining when corporations would qualify for “cooperation credit” in corporate criminal and civil investigations. The most significant—and controversial—provision in the Yates Memo required that “in order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct.” The new policy announced by Rosenstein modifies this “all or nothing” approach to cooperation credit by giving DOJ prosecutors and civil attorneys more flexibility.
In announcing the new policy, Rosenstein reaffirmed the Department’s commitment to prosecuting individual wrongdoers, stating that, “The most effective deterrent to corporate criminal misconduct is identifying and punishing the people who committed the crimes.” However, he stated that the lack of flexibility in the Yates Memo’s approach impeded resolutions and wasted resources, and in some cases was not strictly enforced.
On October 11, 2018, Assistant Attorney General for the Criminal Division of the U. S. Department of Justice (DOJ) Brian A. Benczkowski issued new guidance on the selection of corporate compliance monitors in Criminal Division matters. The Benczkowski Memorandum signals a shift toward a more business-friendly approach to the imposition and use of monitors by the DOJ. Among other new provisions, the guidance directs prosecutors to weigh the potential benefits of a monitor against the costs and burdens on the company, and to consider whether the company’s existing compliance program and controls obviate the need for a monitor.
Read the full Alert on the Duane Morris LLP website.
Duane Morris partners Christopher Casey and Damon Vocke will present a complimentary Directors Roundtable program, “Dealing with Corporate Crisis,” on Thursday, June 28, 2018, from 8:30 a.m. to 10:30 a.m. at the Deloitte Conference Center in New York City. For more information or to register, please visit the Directors Roundtable website.