As highlighted in this prior post, last September 10th DOJ Deputy Attorney General Sally Yates delivered this speech and released this memo titled “Individual Accountability for Corporate Wrongdoing. (See here for the video of the speech). Like prior DOJ policy memos, the memo took the name of the author and quickly became known as the “Yates Memo.”
The Yates Memo attracted substantial press, particularly the portion of the memo and associated speech that focused on individual liability for alleged corporate wrongdoing. (For instance, this post highlighted what others were saying about the Yates Memo).
While some called this a “new” focus on DOJ individual prosecutions, the prior post highlighted that the Yates Memo merely continued the DOJ’s rhetoric as to the importance of individual prosecutions and was substantively similar to this September 2014 speech delivered by then Principal Deputy Attorney General Marshall Miller, this September 2014 speech delivered by then Attorney General Eric Holder, not to mention several other DOJ speeches going back nearly a decade.
The prior post highlighted that in the FCPA context, the DOJ’s rhetoric about individual accountability did not match reality because between 2008-2014, 75% of DOJ corporate FCPA enforcement actions have not (at least yet) resulted in any DOJ charges against company employees.
As highlighted in this post, in November 2015 Yates defended her namesake memo. As to individual accountability, Yates stated:
“The revised factors [in the Yates Memo] now emphasize the primacy in any corporate case of holding individual wrongdoers accountable and list a variety of steps that prosecutors are expected to take to maximize the opportunity to achieve that goal.”
As highlighted in this post, in May 2016 Yates again defended her memo. As to individual accountability, Yates again stated that “it’s critical to hold individuals accountable” for alleged corporate wrongdoing.
In the same May 2016 speech, Yates made the fair point that the DOJ’s “intensified focus on individuals from the inception of an investigation is not expected to result in a flurry of individual indictments overnight.”
However, it is also fair to observe that a year has passed since the Yates Memo and the DOJ’s renewed goal of individual accountability for alleged corporate wrongdoing.
The Yates Memo of course was general in nature not FCPA specific. The remainder of this post is FCPA specific and assesses the Yates Memo after one year in the FCPA context.
As highlighted below, just as before the Yates Memo, the DOJ’s rhetoric about individual prosecutions does not match reality. In fact, since the Yates Memo the rhetoric has become even more hollow.
Since the Yates Memo (again September 2015), the DOJ has brought five corporate FCPA enforcement actions (PTC, VimpelCom, Olympus Latin America, BK Medical (Analogic), and LAN Airlines).
None of the enforcement actions have resulted (at least yet) in any DOJ charges against company employees.
Since the Yates Memo, the DOJ has announced two core enforcement actions involving individuals. In late 2015, the DOJ brought FCPA charges against Roberto Rincon and Abraham Shiera for alleged improper business practices with officials at Petroleos de Venezuela S.A. (PDVSA). In early 2016, the DOJ unsealed additional FCPA charges in the same core action against Moises Millan.
The only other individual FCPA enforcement action was the recently announced action against Samuel Mebiame, a Gabonese national connected to Och-Ziff. (See here for the prior post).
If 2016 ended today (which of course it does not) and there remains only two DOJ individual FCPA enforcement actions in 2016, it would be the lowest number of DOJ individual FCPA enforcement actions since 2004. (See here for a year-by-year tally of DOJ individual FCPA enforcement actions. Note, 2012 also had 2 individual actions).