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What Others Are Saying About The “Yates Memo”


Since its release last week (see here for the original post), much has been written about the “Yates Memo.”

Much of this commentary has simply regurgitated the DOJ’s position as if the policy announcement (much of it old news to those informed) of a political actor represented a big deal. Other commentary used the Yates Memo simply as a hook to market legal and compliance services.

Other commentary however has actually engaged in an analysis of the “Yates Memo” and this post highlights commentary that caught my eye.

Consistent with my own initial commentary, many commentators – including former high-ranking DOJ officials – have noted that the focus of the Yates Memo on individual enforcement actions is nothing new.


This Debevoise & Plimpton Client Alert states:

“As with most policy developments of this nature, the distribution of the Yates Memorandum poses both risks and opportunities for companies and individuals alike, and its actual impact will be seen only when it is implemented.

If taken seriously, and those firms and individuals potentially subject to investigation by DOJ should assume it will be, the Yates Memorandum could alter the outcomes in certain cases by increasing the cost of cooperation, accelerating the timetables under which internal investigations must be completed, and deterring individuals within companies from cooperating to the extent they have previously.

But at the same time, by causing DOJ to focus early – and, at a minimum, at the time when a corporate resolution is definitively proposed – on whether and how individuals can and should be prosecuted, DOJ’s new focus could deter DOJ from the pattern of coercing large-scale monetary settlements from those individuals’ employers in cases in which marginal theories of liability based on novel applications of the law or weak evidence form the basis of a settlement.


At first glance, the Yates Memorandum is unlikely to lead to a sea change in the pattern seen recently in criminal prosecutions of individuals in white collar prosecutions. First and foremost, in most criminal cases the government must prove that the defendant knowingly and intentionally violated the law.3 This often creates a significant problem for prosecutors. As the Yates Memorandum acknowledges, “[i]n large corporations, where responsibility can be diffuse and decisions are made at various levels, it can be difficult to determine if someone possessed the knowledge and criminal intent necessary to establish their guilt beyond a reasonable doubt.”

While knowledge and intent requirements apply equally to charges against corporations and individuals, DOJ has, at times, circumvented the need to prove these elements in enforcement actions against companies by entering into corporate settlements, in which companies enter into plea agreements or Deferred or Non-Prosecution Agreements, under which they agree to pay substantial fines, and admit to detailed statements of wrongdoing.

But while companies may have reasons to enter into such settlements, even in marginal cases, individuals often do not. Prosecutors are fully aware that in gray area cases, where the evidence is thin or the legal theory is novel or weak, many defendants will risk trial rather than plead guilty to even relatively “minor” charges, so as to avoid potential incarceration, financial ruin and personal humiliation. Therefore, if DOJ determines to prosecute an individual, its allegations will likely be scrutinized by a neutral fact finder, which, of course, might result in DOJ failing to prove the facts to the satisfaction of a judge or jury – even in situations in which the company has admitted to those facts as part of its settlement agreement. Because of this fundamental dynamic in which corporations are far more likely to settle a DOJ proceeding than are individuals, there are serious doubts about whether the Yates Memorandum can, even if implemented as intended, achieve a greater number of convictions of (or civil judgments against) individuals, which the Memorandum candidly acknowledges.


Important additional questions will also arise as to how, systemically, the DOJ’s new guidance will influence the dynamic of white collar enforcement and the process of internal investigations conducted by companies seeking to cooperate with the government and/or discharge their duties to shareholders and other stakeholders. On the one hand, the Yates Memorandum makes clear that cooperation credit, which can lead to significant reductions in potential fine or penalty amounts, will now come at a potentially steeper price. To deliver “actionable evidence” of individual wrongdoing within the statute of limitations, moreover, internal investigation plans are likely to require accelerating a number

of steps that previously could be delayed. And, in accelerating those steps, it is entirely possible that the kind of sustained, organized investigative effort that, in the past, might have led to greater understanding of what led to a particular event of alleged wrongdoing will be less likely to occur. Individuals, who will now face a greater risk of prosecution, might be less willing to cooperate, and the kinds of reforms and remediation possible under prior policy may become more difficult to achieve. In this respect, the Yates Memorandum could have unanticipated outcomes that lead to less robust compliance responses in some cases, and less evidence coming to light in others. In acknowledging that some companies may not choose to cooperate in the face of DOJ’s new demands, the Yates Memorandum acknowledges this possibility, but not its full significance.

But the Yates Memorandum may restrain DOJ from some of the more controversial practices of recent years in which large monetary settlements have been extracted from corporations based on marginal legal or factual theories. By focusing new attention on the situation in which no individuals are prosecuted, the Yates Memorandum could well lead DOJ to focus more intently on the reasons why no individuals are charged, including the lack of the kind of evidence necessary to lead a judge or jury to find guilt beyond a reasonable doubt or liability under a civil law standard. If the DOJ’s true desire is to achieve genuine and fair parallel outcomes for employees and the companies for whom they work, the lack of evidence to charge individuals should likewise lead to a conclusion that the company should not be pursued, at least under most laws. Because, as the Yates Memorandum emphasizes, corporations act through their employees and agents, and, generally speaking, cannot be found guilty or held liable unless at least one director, officer, employee, or agent is liable himself or herself, the Yates Memorandum may bring balance back to the world of enforcement against firms, and reduce the number of cases in which companies might be coerced to settle what is otherwise a winnable case.”

This Covington & Burling alert (written under the names of, among others, former Attorney General Eric Holder, former Assistant Attorney General of the Criminal Division Lanny Breuer and former Acting Assistant Attorney General of the Criminal Division Mythili Raman) states:

“In criminal matters, the effect of DOJ’s policy announcement is hard to predict and may not represent a significant change. For example, the guidance on cooperation credit does not appear to represent a departure from current practice. To be sure, the Deputy Attorney General stated … that the memorandum represents a “substantial shift from our prior practice,” and added that “we’re not going to let corporations plead ignorance.” Yet the memorandum reflects practices that are already employed by numerous DOJ components and U.S. Attorneys’ offices, and reflects prior DOJ guidance, such as a September 2014 speech by Criminal Division leadership declaring that “[v]oluntary disclosure of corporate misconduct does not constitute true cooperation, if the company avoids identifying the individuals who are criminally responsible. Even the identification of culpable individuals is not true cooperation, if the company fails to locate and provide facts and evidence at their disposal that implicate those individuals.”

This Morrison & Foerster alert (written under the name of, among others, former Senior Deputy DOJ Chief of the Fraud Section James  Koukios) states:

“Although designed to spur companies to cooperate more completely against their officers and employees, [the Yates Memo policy on cooperation] may actually turn out to be a disincentive to corporate cooperation. Companies must now weigh the risk that DOJ will, at the conclusion of a lengthy, expensive, and intrusive investigation, conclude that the cooperation has not been complete enough to pass the threshold for cooperation credit. For example, one can imagine a situation where a company, acting in good faith, determines based on the evidence available to it that a particular individual was not “involved in or responsible for the misconduct at issue,” but DOJ determines, based on a difference of opinion or perhaps evidence uniquely available to it (like personal emails obtained by a search warrant, individual bank records obtained by a grand jury subpoena, or immunized testimony), that he or she was involved. In this situation, has the company failed to meet the Yates standard of identifying and providing evidence against a wrongdoer? Will it be seen as having “decline[d] to learn” of an individual’s wrongdoing? And, if so, does that really mean the company will get zero cooperation credit? Faced with this “all or nothing” possibility, some companies may now choose to forego the burdens of cooperation and simply respond to subpoena requests if called upon. Raising the stakes of the game this high may convince some that it’s simply not worth playing.”

This Sidley Austin update (written under the name of, among others, former Deputy Attorney General James Cole) states:

“The principal thrust of the new guidance—the requirement that a self-reporting company seeking cooperation credit make a full disclosure to the DOJ, particularly by identifying culpable individuals—expands on the already-existing DOJ practices in criminal cases. In distinguishing between cases in which companies have been punished severely and ones in which companies have received lenient treatment, the DOJ has already emphasized the significance of a company’s disclosures regarding corporate officers involved in wrongdoing.”

This McGuire Woods alert (co-authored by former Deputy Attorney General and Acting Attorney General George Terwilliger) states:

“While cast and emphasized as new policy, [the steps in the Yates Memo] are substantively part and parcel of DOJ’s longstanding standard operating procedures and expectations in white collar cases. The notion of targeting individuals for prosecution has been a stated goal expressed by numerous DOJ officials in recent years …”.


“It should not be news to anyone inside or outside a corporation that federal prosecutors are being asked to identify and prosecute individual executives and managers for their roles in corporate misconduct. However, the Yates Memo provides a telling insight into DOJ’s current policy objective: reach the highest-level business leaders through cooperation deals with lower-ranking executives. The risk with that emphasis is two-fold: (1) lower-level personnel, pressed to deliver something of evidentiary and/or investigative value against higher-ups, could feel pressured to give prosecutors what they want, rather than the less helpful truth they may have; and (2) counsel conducting internal corporate investigations may see less cooperation from executives who fear implicating themselves in suspected wrongdoing or who will hold what they know as a chip with which to bargain with prosecutors.

That kind of chilling effect could significantly impact federal prosecutors who have come to be heavily reliant on corporate cooperation and the results of internal investigations as part of the Department’s white collar enforcement program. As a result, DOJ could find itself facing an increasing amount of the “painstaking reviews” the Yates Memo seeks to avoid.”


The Yates Memo comes at a time when corporations, particularly in the financial services industry, have been particularly vilified and feel under siege by a barrage of seriatim investigations and efforts by new or newly ambitious regulatory bodies to expand their reach and stretch the limits of their oversight authority. Settlements where the government has demanded hundreds of millions to billions of dollars are now routine. Some of the funds extracted have not gone to the Treasury, but rather have been used to fund social program objectives and other endeavors that many view as far from the fines, penalties and/or restitution traditionally imposed in connection with criminal prosecutions and civil enforcement sanctions.

Further, such extended monetary aspects of these settlements raise the specter of a small-town “speed trap”-type factor driving government settlement demands. That is cause for legitimate concern in the business community, especially where many of these settlements are premised not on unmistakable evidence of fraud or other criminal misconduct, but rather seem to be premised on questionable theories of legal liability propounded in the context of the exercise of the government’s tremendous leverage when threatening criminal prosecution. DOJ’s desire to more “fully leverage its resources” by targeting individuals at the very least raises a risk that its hunger for results will cause it to lose sight of the importance of fairness and balance in white collar investigations.

The Yates Memo inflames that concern by observing that cases against individuals do not provide “as robust a monetary return on the Department’s investment” as corporate enforcement actions. As unintentional as it may be, DOJ should expect that those carefully considering that statement may view it as cynical confirmation of their suspicions that DOJ has a revenue-driven motive for some aspects of its enforcement policy.”

This Gibson Dunn publication states:

“The high-profile roll-out of the Yates Memorandum–above-the-fold coverage in major newspapers, a speech by Yates at New York University–obscures the fact that DOJ leaders, at increasingly higher levels of seniority, have been making similar statements for months, even years …”


[T]he Yates Memorandum acknowledges, but does not address, how difficult individual prosecutions in corporate cases are–not only because of the difficulty in obtaining evidence, but also because it is profoundly difficult to determine whether any identified conduct does, in fact, violate federal laws.  More unpredictable will be the effect on corporate behavior. The scale of internal investigations may increase as more intense scrutiny is focused on individuals at the outset. Vigorous investigations of this sort can negatively affect morale within companies, and employees who refuse to cooperate may cause investigations to falter or stall.  Moreover, internal investigations often must deal with historical conduct – frequently in the very distant past and with former employees – and overseas activities that present a host of legal and practical challenges.  The Yates Memorandum may well affect a corporation’s analysis as to how vigorously, or widely, potential misconduct should be investigated where the consequences of not being able to identify culpable individuals could be dire. As a result, it may result in an all-or-nothing approach to cooperation, with many corporations electing to take the latter path.  All of this may temper a corporation’s enthusiasm to self-report potential misconduct.

Thus, corporations that decline to engage in such investigations, or–more problematically–those that are unable to find suitable evidence of individual wrongdoing despite the existence of some systemic problem (which is often the case given how action, intent, and conduct can be diffused throughout a corporation), may decline to cooperate entirely. The Yates Memorandum, consequently, may have an unintended chilling effect on corporate cooperation.”

This Vinson & Elkins post states:

“[The Yates Memo] surely will have ramifications for both individuals and companies that come under DOJ investigation, but they may be most pronounced for individuals involved in misconduct who now face a “Hobson’s choice” of cooperating with their company’s internal investigation, which could increase their own personal risk, or refusing to cooperate at all and risk losing their jobs. Putting individuals to this choice may drive a wedge between the company and the individual and significantly hamper the company’s ability to conduct its internal investigation, which could then limit the company’s ability to cooperate by sharing its findings with the government.”

This Sheppard Mullin post states:

“[Is the Yates Memo] anything really new?  Many experienced practitioners would argue definitely not. For decades, federal prosecutors have focused on bringing charges against the highest level company executives. Almost universally, they hold the opinion that the only way to truly deter corporate crime is to jail executives, the more senior the better. And we all know that corporations can act only through individuals. Anyone who has ever held the post of Assistant United States Attorney—as this author did in the mid-1980’s—or has defended federal criminal investigations knows that among the very first questions in a discussion of cooperation will be: “You understand that full cooperation against individuals will be required, will you be providing information against Mr./Ms. X, Y and Z?”  In the Foreign Corrupt Practices Act area, Assistant Attorney General Leslie Caldwell has made this point every single time she has spoken in public.

So why the memorandum and the highly publicized speech?  Several reasons come to mind: (1) the American public has felt that DOJ has been soft on Wall Street executives; (2) this memorandum gives corporate defense counsel a very clear statement to show clients who are considering cooperation; and (3) the formal internal procedures ensure that federal white collar prosecutors account for their investigations and dispositions of individuals within a corporate crime setting.  Maybe it also gives prosecutors an additional talking point with defense counsel for individuals: “Sorry, DOJ policies tie my hands. I have to go after your client.”

Might this policy result in significantly more prosecutions of individuals?  Doubtful.  Senior executives and other individuals have always been in DOJ’s crosshairs.”

This Alston & Bird advisory states:

“[T]he Yates Memo raises many questions that will need clarification.

What happens if a company does not agree with the DOJ’s assessment that wrongdoing has occurred? Under the new policy, will the company not be viewed as “cooperating” even when it has provided full and complete information to the DOJ as part of its investigation? In other words, if the company does not agree with the DOJ’s view of the facts and the culpability of the individuals involved, is it not cooperating? If so, cooperation with a DOJ investigation does not mean “cooperating” in any normal sense of the term. Rather, it would mean that—in addition to providing full and complete factual information to the government about the conduct at issue—the company must agree with the DOJ’s view of the facts and theory of prosecution and not attempt to offer a factual defense on behalf of the individuals the DOJ views as culpable.”

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