Bringing Back Discretion: DOJ Announces Revisions to Current Policy Concerning Corporate Misconduct

December 19, 2018

In 2015, the Department of Justice (“DOJ”) announced a more aggressive stance requiring individual accountability in civil and criminal investigations of corporate misconduct. This policy change, set forth in a memorandum issued by Deputy Attorney General Sally Quillian Yates (the “Yates Memo”), announced that companies seeking cooperation credit were required (1) to undertake their own investigations, (2) to identify all culpable individuals, and (3) to produce material facts or employee statements related to the individuals’ involvement in the corporate violations. Now, the DOJ is lessening this burden and shifting back towards its pre-Yates Memo discretionary policy.

In a speech delivered on November 29, 2018,  Deputy Attorney General Rod Rosenstein announced significant changes to the DOJ’s policies—primarily changes that return discretion to DOJ attorneys in both criminal and civil cases. Rosenstein emphasized that “pursuing individuals responsible for wrongdoing will be a top priority in every corporate investigation.”

For corporate prosecutions, Rosenstein recognized that the DOJ’s scorched-earth approach effectuated by the Yates Memo did not always accomplish its objectives: to recover fraudulent proceeds, reimburse victims of misconduct, and deter future misconduct. Instead, Rosenstein acknowledged the difficulty in reporting to the government every person involved in alleged misconduct, and emphasized that the government would “focus on the individuals who play significant roles in setting a company on a course of criminal conduct.” To help companies identify key players in misconduct and receive cooperation credit, Rosenstein urged companies seeking credit “to have full and frank discussions with prosecutors about how to gather the relevant facts.”

Rosenstein acknowledged that the primary goal of civil enforcement actions to recover money had not been achieved by the government’s “all or nothing” approach: “When criminal liability is not at issue, our attorneys need flexibility to accept settlements that remedy the harm and deter future violations, so they can move on to other important cases.” Rosenstein took a pragmatic approach that recognized DOJ attorneys cannot pursue civil cases against every individual who may be liable for corporate misconduct. To that end, Rosenstein remarked that these revisions will “restore some of the discretion that civil attorneys traditionally exercised—with supervisory review.”

These changes confirm the DOJ’s commitment to more efficient and appropriate investigations. Although companies are not required to name every single wrongdoer, Rosenstein emphasized that this policy change “prohibits [DOJ attorneys] from awarding any credit whatsoever to any corporation that conceals misconduct by members of senior management or the board of directors, or otherwise demonstrates a lack of good faith in its representations.” And if companies are caught hiding such information, they will not be eligible for any credit.  

The DOJ’s commonsense reforms should encourage even more cooperation from companies, and result in more efficient investigations. Additionally, companies may earn maximum credit by identifying all individuals who were substantially involved in misconduct. Corporations can take advantage of these policy changes by (1) improving their compliance programs, (2) engaging in substantive conversations with DOJ attorneys to assist more fully during investigations, and (3) identifying individuals who played a significant role in corporate misconduct. Under the DOJ’s new sliding scale approach to cooperation credit, corporations will benefit from these good-faith efforts.

For more information, please contact: Jonathan S. Feld at 312-627-5680 or, Jason Ross at 214-462-6417 or, Amelia Marquis at 214-462-6426 or, any of the lawyers listed to the left, or your Dykema relationship attorney.

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