The Foreign Corrupt Practices Act world changed last week, and I am not certain it was for the better. In a speech at New York University School of Law, Deputy Attorney General Sally Yates announced a new Justice Department policy on individual liability in matters of corporate wrongdoing. These remarks coincided with release of an internal Justice Department Memo from Yates (the “Yates Memo”) titled, “Individual Accountability for Corporate Wrongdoing.” While the change did not relate to enforcement solely or even primarily to FCPA, I think it will mean a sea change for compliance practitioners going forward.
Ever since former Attorney General Eric Holder’s remarks about banks being “too big to jail” in the context of prosecuting individuals whose actions helped lead to the financial crisis of 2008; critics have faulted the government’s lack of prosecutions of Wall Street. Even a sitting federal judge, U.S. District Judge Jed Rakoff, has been unrelenting for the Justice Department “not holding individuals accountable for the financial crisis and for settlements that looked like sweetheart deals.” So while this policy revision is focused on areas other than the FCPA, its effect will certainly be felt in investigations and enforcement actions in such cases.
