Justice Department takes aim at Wall Street executives
| Washington
The聽Justice聽Department聽issued new guidance to its prosecutors Wednesday, aimed at encouraging more white-collar criminal and civil cases against corporate executives.
The new policies come amid persistent criticism that the聽Justice聽Department, even while negotiating multi-billion-dollar settlements with large banks, has not been aggressive enough in prosecuting individuals for financial misconduct 鈥� including after the mortgage crisis that devastated the U.S. economy.
The directives were outlined in a memo issued to聽Justice聽Department聽attorneys and to the FBI. Deputy Attorney General Sally Quillian Yates was expected to lay out the policy changes in a speech Thursday at New York University's law school.
Though it's not clear whether the new policies will actually result in additional prosecutions, they are intended to address concerns that thedepartment聽could be doing more to hold individual, high-level executives accountable for corporate fraud.
"Regardless of how challenging it may be to make a case against individuals in a corporate fraud case, it's our responsibility at the聽Departmentof聽Justice聽to overcome these challenges and do everything we can to develop the evidence and bring these cases," Yates will say in her speech, according to excerpts provided by the聽Justice聽Department. "The public expects and demands this accountability. Americans should never believe, even incorrectly, that one's criminal activity will go unpunished simply because it was committed on behalf of a corporation."
The new guidance, which emerged from a聽Justice聽Department聽working group, includes some new measures as well as others that are regarded as best practices already used by some federal prosecutors.
It mandates that corporations turn over evidence of wrongdoing against individuals if they want credit for cooperating with the government, and says prosecutors should get as much information as possible about executives before finishing up their corporate investigation.
In addition, the聽department聽is directing its civil and criminal lawyers to work together in all corporate matters, and says corporate investigations must begin with a focus on individuals. The聽Justice聽Department聽will also generally not agree during corporate settlements to protect individuals from either criminal or civil liability.
"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 victimize our citizens. It's the only way to truly deter corporate wrongdoing," Yates will say.
The guidance, issued a few months into the tenure of Attorney General Loretta Lynch, appears aimed at turning the page from some of the criticism that dogged her predecessor, Eric Holder, in the aftermath of the largest economic meltdown since the Great Depression. Public advocacy groups and other watchdogs expressed frustration that the聽Justice聽Department聽did not do more to hold individual executives to account for the mortgage crisis, though Holder sought to assuage those concerns in the last two years with a series of multi-billion-dollar settlements with Citigroup, JPMorgan Chase and Bank of America.
The聽department's聽signature criminal case against a financial institution in the last year or so鈥� an $8.9 billion penalty against French bank BNP Paribas for sanctions violations 鈥� did not result in criminal charges against individual executives.
Holder and other聽Justice聽Department聽officials have often spoken about the challenges in prosecuting large corporations and their executives.
The memo issued to prosecutors concedes those challenges, including in cases involving millions of pages of documents and where high-level executives are insulated from day-to-day activities. But, Yates said, individual accountability can deter future crimes, ensure that the right person is punished and promote "the public's confidence in our聽justice聽system."
