Sally Yates was Already Famous for Changing the Focus of Compliance Investigations – The Yates Memorandum

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April 5, 2017

By now the whole world knows about Sally Yates.  We are likely to see a lot more of her as a central figure in Congressional investigations.  For some of us who deal with compliance investigations, Sally Yates was famous long before her refusal to defend the immigration ban.  She was the author of the famous “Yates Memorandum” that changed the focus of corporate investigations to require investigation of potential individual wrongdoing in order to receive cooperation credit from Federal prosecutors.

The Yates Memo directs federal prosecutors, as well as civil attorneys investigating corporate wrongdoing, to maintain a focus on responsible individuals, recognizing that holding them accountable is an important part of protecting the public in the long term.  In fact, prosecutors are directed to first look at potential individual wrongdoing when investigating a case.  The new policy requires companies facing potential Federal civil and criminal charges to investigate individual wrongdoing and report it to the government in order to receive government cooperation credit.  The new federal policy applies to all federal criminal and civil prosecutions in all industries.

The Yates Memo is the most recent in a line of actions by Federal prosecutors that began in the late 1990s that have increased the focus on seeking accountability from the individuals who perpetrate wrongdoing.  The Yates Memo resulted in an update to the U.S. Attorney’s Manual (“USAM”) provisions covering Principles of Federal Prosecution of Business Organizations (USAM § 9-28.000).  Inclusion of principles into the USAM means the concepts in the Yates Memo are now operational and are required to be integrated into the prosecutorial decision making process across the country.

6 General Principles of the Yates Memorandum

Principle 1:  “To be eligible for any cooperation credit, corporations must provide the Department all relevant facts about the individuals involved in corporate misconduct.”

Principle 2:  “Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation.”

Principle 3:  “Criminal and civil attorneys handling corporate investigations should be in routine communication with one another.”

Principle 4:  “Absent extraordinary circumstances, no corporate resolution will provide protection from criminal or civil liability for any individuals.”

Principle 5:  “Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires and declinations as to individuals in such cases must be memorialized.”

Principle 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.”

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