During Monaco’s presentation, she indicated three primary enforcement priorities. First, the DOJ will prosecute all individuals who commit and profit from corporate crime, including corporate executives. Second, the DOJ will increase its corporate enforcement resources. Third, the DOJ will hold companies accountable that do not proactively put compliance programs in place, spend resources anticipating problems, or hold individuals accountable.
This set of priorities came along with very clear steps the DOJ will take over the coming months. Here are three of those steps and how they may impact companies under investigation by the Justice Department.
DOJ action step #1: new limits on corporate cooperation credit
Monaco announced that the standards previously articulated in the DOJ’s Yates Memo (dated September 9, 2015 and entitled “Individual Accountability for Corporate Wrongdoing”) will be reenacted, and that corporate cooperation credit will only be available to companies that provide all non-privileged information about individuals involved in or responsible for the misconduct at issue. This matches the focus on individual culpability and requires a company to disclose all individuals involved in the misconduct – regardless of their position, status, or seniority – not simply those that the company determines are “substantially involved.”
This action may expand the scope of internal investigations, as well as required litigation holds, document collections, and interviews. Companies will have to be very cautious when determining the relevant list of individuals to investigate, as they may lose cooperation credit if the DOJ finds that they have not been fully transparent.
DOJ action step #2: investigate all prior misconduct
Monaco directed federal prosecutors to consider all corporate misconduct when determining criminal charges and resolutions. This includes any misconduct discovered during prior domestic or foreign criminal, civil, or regulatory actions involving the company or its parent, divisions, affiliates, subsidiaries, or other entities within the corporate family.
This action will make it significantly more difficult for a company or its defense counsel to attempt to limit any DOJ investigation to the specific conduct at issue, as all allegedly problematic conduct (including conduct identified by other state and regulatory agencies) will now be considered when addressing potential dispute resolution. This widens the scope of information the DOJ will review and could include ESG disclosures and related regulatory inquiries from both domestic and international agencies. It also makes the need for prompt action, in consultation with counsel, to address any potential problems even more apparent – as well as a robust internal compliance program.