DOJ Signals Changes to Corporate-Crime Prosecution

by Morgan Lewis

Morgan Lewis

Deputy Attorney General said he anticipates policy changes “in the near future” and suggested emphasis on individual accountability.

The US Department of Justice (DOJ) may soon announce changes to its policies for prosecuting white-collar crime. During a question-and-answer session at the Heritage Foundation on September 14, Deputy Attorney General Rod Rosenstein said that the federal government’s policy on prosecuting corporate crime is undergoing a “routine” review, and noted that he anticipates “some change to the policy” and to “corporate fraud principles” to be announced “in the near future.” His comments send a strong signal that the DOJ is considering changes to the current policy, which was laid out in a 2008 memorandum issued by former Acting Attorney General Mark Filip, and updated in September 2015 by former Deputy Attorney General Sally Yates (The Yates Memo), both of which are memorialized in changes to the U.S. Attorney’s Manual. (Title 9, Chapter 28.)

The Yates Memo altered aspects of DOJ’s corporate prosecution policies to place a greater focus on investigating and prosecuting individuals suspected of involvement in corporate wrongdoing. It also implemented a new threshold for cooperation credit, directing DOJ attorneys not to consider giving any cooperation credit to corporate targets unless the company provides all relevant information about any individuals involved in potential misconduct.

Although Rosenstein did not speak to any specifics of upcoming policy shifts or changes, he suggested that he supports the Yates Memo’s emphasis on individual accountability. “The issue is can you effectively deter corporate crime by prosecuting corporations or do you in some circumstances need to prosecute individuals?” he said. “I think you do.”

Rosenstein’s general reference to upcoming changes to the “corporate fraud principles” leaves open the possibility that the DOJ may be contemplating broader changes beyond the scope of prior reforms implemented following the Yates Memo. In his remarks, Rosenstein described how “[e]very administration . . . looks at these issues and determines whether or not the internal guidelines that were written in the last administration are effectively addressing what we think is the crime problem of the present.”

Rosenstein’s reference to past changes to DOJ’s corporate prosecution policies suggests that he may be next in a line of deputy attorneys general to reform DOJ’s Principles of Federal Prosecution of Business Organizations, which were first announced in a 1999 policy memorandum issued by then-Deputy Attorney General Eric H. Holder, Jr. at the end of the Clinton administration. The Holder Memo was subsequently revised by Deputy Attorneys General Larry Thompson and Paul McNulty during the Bush administration, and again in 2008 by then-Deputy Attorney General Filip. Filip issued a reformulation of DOJ’s corporate prosecution guidelines which, from that point forward, were then embedded in the list of factors set forth in the policy that DOJ attorneys are to consider in guiding their decisions on whether to bring charges, negotiate a plea or other agreement (i.e., a deferred or non-prosecution agreement) with a corporate entity became known colloquially as “the Filip Factors.”



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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