On November 29, 2018, Deputy Attorney General Rod Rosenstein announced changes to the Department of Justice’s policy concerning individual accountability in corporate cases, stating that “pursuing individuals responsible for wrongdoing will be a top priority in every corporate investigation.” Under the revised policy, companies seeking cooperation credit in criminal cases must identify each and every individual who was substantially involved in or responsible for the relevant criminal conduct. Citing input from prosecutors, law enforcement, and industry, and noting that “[o]ur policies need to work in the real world of limited investigative resources,” Rosenstein further clarified that DOJ would not require companies to identify every employee who played any role in misconduct, but that prosecutors would focus on those likely to be prosecuted.
Explaining the impetus for the change, Rosenstein said, “The most effective deterrent to corporate criminal misconduct is identifying and punishing the people who committed the crimes. So we revised our policy to make clear that absent extraordinary circumstances, a corporate resolution should not protect individuals from criminal liability.”
With respect to civil cases, in which the government’s primary goal is to recover money, Rosenstein again cited to DOJ’s responsibility to effectively allocate resources and said “[o]ur civil litigators simply cannot take the time to pursue civil cases against every individual employee who may be liable for misconduct, and we cannot afford to delay corporate resolutions because a bureaucratic rule suggests that companies need to continue investigating until they identify all involved employees and reach an agreement with the government about their roles.” Accordingly, the revised policy will allow for greater prosecutorial discretion, though companies must still identify all wrongdoing by members of senior management and directors and cooperate with DOJ in good faith in order to receive any cooperation credit. Maximum cooperation credit will be reserved for companies that identify every individual who was substantially involved in or responsible for misconduct.
DOJ expects that these policy clarifications will increase efficiency while allowing the Department to pursue enforcement actions against both companies and individuals. In practice, it remains to be seen whether these announced changes will have any practical effect in corporate enforcement negotiations.
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