Speaking at the ABA Institute on White Collar Crime earlier this month, Attorney General Merrick Garland outlined the Department of Justice’s continued emphasis in prosecuting individuals “who commit and profit from corporate malfeasance.” Garland reiterated and built on Deputy Attorney General Lisa Monaco’s October 2021 speech in which she announced the Department’s reinstatement of the Yates Memo. (A detailed discussion of Monaco’s speech is available here.) Attorney General Garland repeatedly referred to the prosecution of individuals as the DOJ’s “first priority” in addressing corporate criminal conduct. In resolving allegations of wrongdoing, he emphasized that “to be eligible for any cooperation credit, companies must provide the Justice Department with all non-privileged information about individuals involved in or responsible for the misconduct at issue” regardless of seniority or scope of involvement.
Attorney General Garland described a surge of financial resources dedicated to corporate prosecutions in furthering the Department’s corporate enforcement efforts and outlined three so-called “force-multipliers”: (1) increased interagency partnerships; (2) the use of data analytics to identify patterns indicative of fraud; and (3) corporate defendants’ disclosure of individual misconduct — i.e., the reimposition of the Yates Memo principles announced by Deputy AG Monaco in October. This third “force-multiplier” was particularly notable because it effectively makes corporate defendants’ counsel a tool of federal law enforcement.
Attorney General Garland’s speech demonstrates the DOJ’s intent to rely on corporate cooperation going forward. Companies that wish to settle allegations of possible criminal liability will be expected to conduct a thorough internal inquiry concerning the roles of all individuals who may have engaged in alleged wrongdoing. This proposed deputization of corporate defense counsel will not only increase the costs of internal investigations, but the ethical concerns associated with those inquiries. The potential divergence between corporate defendants and their employees will require counsel to be cautious to provide employees proper Upjohn warnings, document the timing and substance of that Upjohn warning, and continuously evaluate when those employees may need independent representation.
Of course, as always, the best prophylaxis is for companies to review their compliance programs, now, to ensure the programs adequately monitor for and remediate misconduct and, thereby, avoid or minimize DOJ scrutiny later.
