“Corporate Wrongdoing” and Investigative Efforts

Welcome to the September edition of our newsletter!  In this issue, we’ll examine the impact of the Justice Department’s “Yates memorandum”  after one year.

In September 2015, the U.S. Justice Department issued new guidance, authored by Assistant Attorney General Sally Yates, for federal prosecutors concerning “corporate wrongdoing.”  Part of that memorandum was clear language indicating that in order to obtain a “cooperation credit”, subject companies must provide “all relevant facts about the individuals involved in corporate misconduct.”  The ambiguity of this language does not limit its scope to all internal employee records, or all information in possession of the company at that time, but simply “complete factual information about individual wrongdoers.”

This leaves open the possibility that companies will find it advantageous to identify relevant information that exists outside of their records.  If an executive was accused of taking bribes in return for steering business to a vendor, for example, it may be prudent to develop a financial profile of the executive from public records, as well as to determine any other links between the executive and the vendor.  Even if prosecutors don’t request such information, any prosecutorial effort is likely to include that level of investigative due diligence, and obtaining the context necessary to anticipate what prosecutors are likely to allege about an individual’s motives – to the extent possible via public records — can only help your company as it prepares to cooperate with authorities.