The new policy makes the prosecution of individual executives, and not just the corporations that employ them, a top priority for federal prosecutors. It followed years in which the Justice Department was pummeled for not doing enough to prosecute high-level executives for financial misconduct, particularly in the wake of the 2008 financial crisis.
“Crime is a crime and lawbreakers must be held responsible regardless of whether they violate the law on the street corner or in the corner office,” Yates said, according to the prepared remarks.
The new policy will “emphasize the primacy in any corporate case of holding individual wrongdoers accountable and list a variety of steps that prosecutors are expected to take to maximize the opportunity to achieve those goals,” she said.
Some critics have already questioned whether the changes will produce significant results. Prosecutors will still face serious obstacles in pursuing these types of cases, critics have said.
For example, some have said employees may be less willing to cooperate with their company’s internal investigation if the details could then be shared with federal prosecutors.
“The requirement that corporations must identify culpable individuals to receive cooperation credit is a new approach that would be beneficial if it results in greater cooperation from companies, but could be harmful if it results in scapegoating of individual employees,” said David M. Uhlmann, a law professor at the University of Michigan, who spent more than a decade at the Justice Department.
Yates, speaking before the American Bankers Association and American Bar Association, said she recognized those concerns, but defended the agency’s policy.
“I will acknowledge that our focus on culpable individuals may make some employees nervous,” Yates. “Some may have reason to be nervous.”
“Understand that we’re not asking companies to pin a scarlet letter on their employees or provide us with prosecutable cases against them,” she said.
The policies outlined by Yates go further than many expected, said Brandon Garrett, a law professor at University of Virginia School of Law. “The DOJ is rethinking the entire approach to corporate prosecutions,” he said.
“They are going to tighten their focus on cooperation, prioritize self-reporting, and do a better job at tracking these cases,” Garrett said. “But I don’t think this is going to be enough to reassure skeptics worried that companies are largely getting let off the hook for the most serious crimes.”