The Justice Department announced last week that it is no longer sufficient to go after companies for financial misconduct. It will target the individuals responsible—with criminal and civil actions, and it requires companies to help finger their executives.
The DOJ memo requires all civil and criminal investigations to examine responsible individuals from the get-go, not as an afterthought. It also prohibits cooperation credits to companies unless they provide the DOJ all relevant facts regarding the individuals responsible for the misconduct. The memo said the new accountability strategies will help deter future financial abuse and promote important changes in corporate behavior. They also are aimed at boosting public confidence in the judicial system.
The new guidelines also encourage communication among civil and criminal investigators; prohibit release of individuals from liability when resolving the matter with the corporation; requires a clear plan for resolving the individual cases before concluding the corporate liability component; and state that civil attorneys should consistently focus on individuals and the company and evaluate whether to bring suit against individuals based on considerations beyond an individual’s ability to pay.