Five Common Misconceptions About The Yates Memo

Much has been written over the last sixteen months interpreting the shift in U.S. Justice Department policy placing greater emphasis on individual accountability for corporate wrongdoing in federal civil and criminal enforcement proceedings.  Apparently not all of it was accurate.  In what has become known as the “Yates Memo” issued on September 9, 2015, U.S. Deputy Attorney General Sally Quillian Yates outlined six steps to strengthen the Department’s pursuit of individual wrongdoing in corporate investigations:

1.      In order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct;

2.      Criminal and civil corporate investigations should focus on individuals from the inception of the investigation;

3.      Criminal and civil attorneys handling corporate investigations should be in routine communication with one another;

4.      Absent extraordinary circumstances or approved departmental policy, the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation;

5.      Department attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and

6.      Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.

Following issuance of the policy, Ms. Yates gave a series of speeches addressing her memo and the Department’s renewed focus on individual accountability.  In one speech to the New York City Bar Association White Collar Crime Conference on May 10, 2016, Yates spoke to what she perceived to be a fundamental disconnect between the contents of her memo and the way it was being interpreted: “I will confess that I haven’t read every single client alert that has gone out since this policy was issued, but from what I have read, the reaction in the corporate defense bar seems to be everything from ‘The sky is falling,’ to ‘Nothing has changed.’  As I’ve said before, the truth, as it often is, is somewhere in the middle.”