An earthquake in the world of Foreign Corrupt Practices Act enforcement occurred in September, and it relates to the Justice Department’s now stated goal of pursuing culpable individuals rather than simply settling with corporations that pay large fines for misconduct. It was announced by Deputy Attorney General Sally Yates in a speech to the New York University School of Law titled, “New Policy on Individual Liability in Matters of Corporate Wrongdoing.” At the same time the Justice Department released a memo titled “Individual Accountability for Corporate Wrongdoing” (the “Yates Memo”) laying out the parameters of the new policy.
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 2007-08) critics have panned the government’s lack of prosecutions of Wall Street. Even a sitting federal judge, U.S. District Court Judge Jed Rakoff, has been unrelenting on the Justice Department. Clearly in response to these criticisms, the Yates Memo and the Yates speech promise that the Justice Department will reprioritize their focus on individual prosecutions.
