“The Name’s Bond. James Bond.”: DOJ Requires Companies to Identify All Responsible Individuals

November 15, 2021By Anne K. Walsh & JP Ellison

It may be just a coincidence that DOJ released its latest policy pronouncement at the same time as the final “Daniel Craig as James Bond” movie.  But like James Bond, companies in the crosshairs of a government investigation have No Time to Die, as they answer to shareholders and fight for corporate survival.  In an October 28, 2021 Memorandum issued by Deputy Attorney General Lisa Monaco, DOJ announced that it is reverting to and reinforcing the Individual Accountability Policy originally announced in the Yates memo, which we discussed here.  That policy permits prosecutors to award cooperation credit to companies only if they provide DOJ with all relevant facts relating to the individuals responsible for the misconduct:

To receive any consideration for cooperation, the company must identify all individuals involved in or responsible for the misconduct at issue, regardless of their position, status, or seniority, and provide to the Department all nonprivileged information relating to that misconduct. To receive such consideration, companies cannot limit disclosure to those individuals believed to be only substantially involved in the criminal conduct. This requirement includes individuals inside and outside of the company.

Note that last sentence: individuals inside and outside of the company.  Corporate counsel previously may have taken the position that there is no control over individuals outside of the company, so there could not be any disclosure related to those individuals, but DOJ Does. Not. Care.

The new policy also requires prosecutors to consider all past misconduct, not just violations that relate to the instant offense:

[W]hen making determinations about criminal charges and resolutions for a corporate target, prosecutors are directed to consider all misconduct by the corporation discovered during any prior domestic or foreign criminal, civil, or regulatory enforcement actions against it, including any such actions against the target company’s parent, divisions, affiliates, subsidiaries, and other entities within the corporate family.

Again, companies take note: DOJ is expanding its prior position to consider foreign enforcement actions (even if standards and laws are different in those jurisdictions), violations of “regulatory rules” (which in the FDA space are commonplace), and misconduct of affiliated companies (which in this day, with multi-structured corporate entities, could require consideration within wholly unrelated industries).  This new calculus likely will impact future settlement discussions as the implication of a settlement by one corporate entity could present DOJ with a License to Kill one of its sister entities.

DOJ intends to revise the relevant sections of the Justice Manual relating to Principles of Federal Prosecution of Business Organizations.

Categories: Enforcement