US DoJ intensifies efforts to crack down on white-collar crime

10 Sep 2015

The US justice department said it would undertake a new effort to combat white-collar crime following the financial crisis and corporate misconduct on Wall Street.

"Crime is crime. And it is our obligation at the Justice Department to ensure that we are holding lawbreakers accountable regardless of whether they commit their crimes on the street corner or in the board room," deputy attorney general Sally Yates said.

The department yesterday issued a new memo to prosecutors explaining how it would tackle corporate wrongdoing that placed new restrictions on corporations that failed to report misconduct and amended how settlements would be reached.

Prosecutors would also increasingly pursue corporations in lawsuits rather than civil cases against individuals.

The memo could broadly point to the direction new attorney general Loretta Lynch would steer the department, which in recent years had focused on terrorism.

According to Yates, "Our mission here is not to recover the largest amount of money from the greatest number of corporations; our job is to seek accountability from those who break our laws and victimise our citizens. There is real value, however, in bringing civil cases against individuals who engage in corporate misconduct, even if that value cannot always be measured in dollars and cents."

"Effective immediately, we have revised our policy guidance to require that if a company wants any credit for cooperation, any credit at all, it must identify all individuals involved in the wrongdoing, regardless of their position, status or seniority in the company, and provide all relevant facts about their misconduct,'' Yates would say.

''The rules have just changed,'' Yates said. ''Effective today, if a company wants any consideration for its voluntary disclosure or cooperation, it must give up the individuals, no matter where they sit within the company.''

The justice department had long been criticised for failing to target executives who presided over the rampant fraud that facilitated the crises.

''Corporate matters cannot be resolved without clear plan to resolve cases against individuals and all decisions declining to prosecute potential culpable individuals must be approved by the US attorney of the head of the division handling the case,'' according to the new Justice guidelines.

''Civil attorneys will consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual's ability to pay.''