Certification: A New Yates Memo Requirement?

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On February 4, the Wall Street Journal reported that the DOJ’s Fraud Section will now require companies to certify that they have “fully disclosed all information about individuals involved in wrongdoing before finalizing a settlement agreement.”

We’ve previously covered the DOJ’s September 2015 release of the Yates Memo, which, among other things, announced that the DOJ would require corporations seeking cooperation credit to investigate, determine, and identify to the DOJ the individuals involved in or responsible for the alleged misconduct, regardless of their positions at the company. In addition, the Yates Memo requires companies to disclose all facts related to the misconduct, not just facts the company deems relevant.

The Wall Street Journal reports that DAG Yates intends to add a requirement that any settling company seeking cooperation credit must execute a written certification confirming that all non-privileged information about individuals involved in the alleged wrongdoing has been fully disclosed before finalizing a resolution of the matter. The certification could be executed by the company’s general counsel, chief compliance officer, board member, director, or audit committee member. That person would be personally liable for the company’s disclosure.

If instituted, the certification requirement will add to a company’s considerations concerning self-disclosure and cooperation with the DOJ. The certification requirement should be a consideration from the inception of (and throughout) any internal investigation and may impact how the investigation is planned, staffed, supervised, and conducted. Companies under investigation—and those given the unenviable task of executing certifications—may face the very real possibility that the DOJ and the company will take materially different views of the relevant facts and the culpability of individual employees. A good faith disagreement with the DOJ could serve as the basis for further criminal charges or civil liability.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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