November 30, 2018

Department of Justice Announces Major Changes to “Yates Memo”

The holiday season is in full swing, but the Department of Justice (DOJ) isn’t letting visions of sugar plums get in the way of conducting business.   

In 2015, then-Deputy Attorney General Sally Yates issued a guidance memo—known as the Yates Memo—that ordered Department attorneys to adopt an “all or nothing” approach to corporate compliance and cooperation credits. Essentially, the Yates Memo made cooperation credit for corporations conditional on their disclosure of all information on any individuals who might have been involved in wrongdoing.

This put companies in an impossible position by requiring them to prove they investigated and discovered every piece of information without offering cooperation credit. By requiring fishing expeditions against their employees, the policy also threatened to complicate compliance programs.

But now—in a major shift—the DOJ is signaling it will narrow the reach of the Yates Memo.

Deputy Attorney General (DAG) Rod Rosenstein recently announced that the DOJ is moving away from this unworkable “all or nothing” approach.

As Rosenstein explained in his announcement, the DOJ learned that the “policy was not strictly enforced in some cases because it would have impeded resolutions and wasted resources. Rosenstein said DOJ’s policies “need to work in the real world of limited investigative resources” and that he “prefer[s] realistic internal guidance that allows our employees to reach just results while following the policy in good faith.”

The DOJ will still continue to hold individuals criminally and civilly responsible for their misconduct, but it will do so in a way that ensures accountability without creating needless delays in corporate investigations.

For criminal matters, some of the new changes include identifying only the individuals who were substantially involved in or responsible for the misconduct to receive cooperation credit. And in civil matters some of the new changes include identifying wrongdoing by senior officials—including senior management and the board of directors.

In his speech announcing the new changes, DAG Rosenstein said “our corporate enforcement policies should encourage companies to implement improved compliance programs, to cooperate in our investigations, to resolve cases expeditiously, and to assist in identifying culpable individuals so that they can also be held accountable when appropriate.”

The DOJ is ending 2018 on a positive note by enacting thoughtful policies that will stem the tide of over-enforcement.  

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