The Yates Memo - What Companies Need To Know - JMBM Corporate Defense Attorney Anthony Pacheco

Published on Nov 19, 2015

Jeffer Mangels internal investigations and corporate defense lawyer, Anthony Pacheco, discusses what companies need to know about the recent U.S. Department of Justice memo regarding individual accountability for corporate wrongdoing, known as the Yates Memo, and what steps they can take to be prepared.

My name is Anthony Pacheco. I'd like to talk to you about an important new development in the area of white collar criminal defense and investigation. This is a change–a sea change–in the way that prosecutors are going to be looking at large white collar cases.

What's the change? Well, the new Attorney General, Loretta Lynch, has issued a memo through her Deputy Attorney General Yates, and that memo is going to reshape the fundamentals of federal prosecution. It's going to reshape how prosecutors think about cases.

What's it going to do? It's going to tell prosecutors that they have to focus on individual conduct and companies. That it's no longer okay to just go after companies and get corporate pleas, and to get big fines and to install monitors and do all the other things that they do, relative to companies. Now, at the same time, they have to keep their eye on individual conduct. Investigate it and prosecute it.

As a company what does that mean? That means that companies have to focus on the Yates Memo and understand its dynamics and what prosecutors are looking at, and how they'll be thinking about particular cases.

Companies need to understand:

  1. That prosecutors are going to be looking at whether companies, in their own internal investigations, are sharing and disclosing all information with the government. Are they naming names? Are they identifying the conduct of individuals of companies who are involved in the alleged misconduct? That's going to be very important prior to any deal being reached with a corporate entity.
  2. I think federal prosecutors are going to be looking at this, and they're going to be wanting companies to look right at the beginning to determine whether individuals are involved in misconduct. They're going to want to coordinate the criminal, civil, regulatory, and administrative processes in investigating corporate criminal misconduct in companies. All of that's going to be coordinated.

This distinct change at the Department of Justice has to do with the shift in mentality to focus on individuals, because there was a thought at the Department of Justice, and elsewhere in the community, that it wasn't being done. So, are there going to be challenges to it – you bet. There's going to be resource challenges. Currently, a lot of the resources are shifted into anti-terrorism, espionage, cybercrime–all important areas of investigation and potential prosecution. The problem is, they're limited resources, but there's going to have to be a reallocation now to deal with the Department of Justice's new announcement to focus on white collar cases and individuals and companies.

Are judges are going to agree with this focus? Will juries agree? Will our legislative branch agree? Will there be some push-back to this? You bet. But at the end of the day, individual line prosecutors throughout the country, in every state and in every federal district, are going to be tasked with looking at individual conduct and in holding those companies accountable. That's an important sea change, and it's something to really pay attention to.

How can companies deal with this type of situation when you've got this type of announcement? Companies have to focus on their compliance programs. They have to be robust in monitoring conduct that occurs at the various companies. They have to make sure that individuals are accountable, and if there is a problem at a company, they may have to make sure that they're represented by counsel who understands the Yates memo and understands the dynamics of how to apply it and how best to navigate a company through these treacherous waters.

So, it is an important sea change. I think the commentators are somewhat split on how it will all work, but at the end of the day that sea change is going to affect how prosecutors see criminal cases.

I'm soon going to be talking to you about how this may affect the middle market and smaller companies. Look forward to talking to you then.

Any questions, call me–Anthony Pacheco.