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DOJ explains rule changes in light of Yates memo

The U.S. Department of Justice (DOJ) detailed new rules that would focus investigations of corporations on responsible individuals and warned that companies cannot abuse the attorney-client privilege to hide key facts in criminal investigations.

On Monday, Deputy Attorney General Sally Yates, who issued the so-called Yates Memoranda in September, detailed DOJ policy on how the department will pursue criminal cases. Yates’ comments, at the ABA’s Money Laundering Enforcement Conference, specified changes to the United States Attorney’s Manual which establish objectives for criminal and civil investigations of corporations.

In prepared remarks, Yates provided a new mission statement for DOJ investigations: not to recover the largest amount of money from the greatest number of corporations but to “seek accountability from those who break our laws and victimize our citizens.” The changes make clear the practical impact of the shift to prosecuting individuals, not just corporations. Yates also cited a number of steps that prosecutors are expected to take to maximize the opportunity to pursue individual wrongdoers. …

New DOJ Attorney-Client Privilege Rules Don’t Apply to SEC

The U.S. Department of Justice will no longer allow its prosecutors to pressure corporate executives to disclose privileged documents. The much-criticized current policy had been to label companies uncooperative if they failed to reveal documents and communications that fall under the attorney-client privilege. The DOJ has revised the policy effective immediately.

Furthermore, the DOJ can no longer demand “non-factual” attorney work product and is not permitted to consider whether a company pays its attorney fees in advance or how a company disciplines employees when deciding whether the company is cooperating with an investigation. The DOJ has described the new policy by saying that refusal to cooperate by a corporation with an investigation is not evidence of guilt.

The SEC is not bound by the new rules; however, a bill being considered by the U.S. Senate would change that. Currently, the SEC recommends that companies under investigation share the results of internal investigations with the SEC even if such reports are privileged.  …