Randy Grossman
Partner Manatt, Phelps & Phillips, LLP
Randy Grossman is a former U.S. Attorney for the Southern District of California, a current partner with Manatt, Phelps & Phillips, LLP in San Diego and leader of the San Diego office. Randy focuses on government and internal investigations, white collar and civil litigation, and corporate compliance counseling.
Misa Eiritz
Associate Manatt, Phelps & Phillips, LLP
complex commercial litigation, government and internal investigations
Misa Eiritz is an associate with Manatt, Phelps & Phillips, LLP in the firm's Los Angeles office. Misa's practice focuses on complex commercial litigation and government and internal investigations.
Each Attorney General and Deputy Attorney General of the U.S. Department of Justice makes their mark on corporate compliance programs nationwide by issuing guidance materials, oftentimes in the form of publications, memoranda, and remarks. These documents and statements have important ramifications in the white-collar context, as they frequently lay out the factors that Department of Justice (DOJ) prosecutors consider when investigating a corporation as part of a criminal enforcement action. In addition, this information serves as a helpful resource for companies when crafting, implementing, and assessing their compliance programs. Under the Biden administration, Deputy Attorney General Lisa Monaco issued an unprecedented number of corporate compliance policies and memos that built on decades of policies and guidance from prior Deputy Attorneys General. As we head toward the inauguration of President-elect Trump, corporations and the lawyers representing them are trying to predict the changes the new administration will make within the DOJ. While DOJ's priorities and focus will certainly shift, if the past is prologue, many of the longstanding enforcement policies and compliance guidance embraced and promulgated by DOJ over the years are likely to remain intact.
HISTORY OF DOJ POLICIES AND GUIDANCE
The priorities of each DOJ administration evolve over time and with those changes, the factors guiding federal prosecutors in investigating, charging, and negotiating a plea or other agreement with respect to corporate crime also change. In many ways, these factors share the same foundational principles required under the U.S. Sentencing Guidelines, but they differ in that they do not create a formula-driven decision-making process as articulated in those guidelines. As summarized below, the past 25 years have seen each Deputy Attorney General (DAG) push out guidance specifically related to corporate compliance and cooperation.
The original factors were issued on June 16, 1999, by DAG Eric Holder in a memorandum titled "Bringing Criminal Charges Against Corporations" (also known as the "Holder Memo").
Available at justice.gov The Holder Memo's framework went on to influence all future DOJ memos, and it enumerated the nine factors guiding prosecutors while heavily focusing on "cooperation credit." Several years later, in 2003, the Thompson Memo was issued by then-acting DAG Larry Thompson.
Available at dag-memo The Thompson Memo came in the wake of the Enron scandal and allowed prosecutors to consider waiver of privilege as part of cooperation and encouraged DOJ to probe the "authenticity of a corporation's cooperation." Three years later, on Dec. 12, 2006, (and in part as a response to legislative and judicial pressure) DAG Paul McNulty's memo superseded the 2003 Thompson Memo.
Available at mcnulty_memo And while the McNulty Memo once again reiterated many of the original charging factors, it further clarified that companies seeking cooperation credit are not required to waive the attorney-client privilege or cut off the payment of legal fees for employees under investigation or indictment. In 2008, the Filip Memo (authored by DAG Mark Filip) further transformed the factors DOJ prioritized when determining whether a corporation would receive "cooperation credit," and the Filip Memo shifted the focus onto the disclosure of relevant facts in addition to a corporation's conduct; any similar prior wrongdoing; the corporation's cooperation with the investigation; the corporation's compliance program; efforts to remediate the misdeeds; and the collateral consequences to others. Available at dag-memo In addition, the Filip Memo recognized that both the compliance program in place when the misconduct occurred and any remedial efforts to improve the compliance program were important in DOJ's decision-making process, and additional changes made it more difficult for DOJ to conclude that it would be appropriate to charge a corporation. Almost a decade later, on Sept. 9, 2015, the Yates Memo (issued by DAG Sally Yates) set new guidance regarding individual accountability for corporate wrongdoing and noted that in order for a corporation to receive any credit for cooperating with the government, the corporation must conduct an internal investigation and turn over the results to the government and identify culpable employees. Available at dag_memo2 This new policy emphasized the need to hold high-level officials and executives responsible for misconduct, and directed DOJ to consider building and bringing a criminal or civil case against culpable individuals.
RECENT KEY POLICIES
More recently, under the Biden administration, DOJ has been very active in leaving its mark on the principles of prosecuting corporations, and these key policies have been incorporated into the Justice Manual. See Justice Manual, Title 9 Criminal, Section 9-28.000 Principles of Federal Prosecution of Business Organizations, available at https://www.justice.gov/jm/jm-9-28000-principles-federal-prosecution-business-organizations. More specifically, DOJ has focused on individual accountability, voluntary self-disclosures, harsher penalties for recidivists, clawbacks of compensation given to individual corporate wrongdoers, and encouraged corporate investment in compliance. See generally https://www.justice.gov/criminal/criminal-fraud/policy-materials. Moreover, a variety of new programs and policies include: (1) The Corporate Whistleblower Award Pilot Program which awards whistleblowers who provide the Criminal Division with original and truthful information about corporate misconduct that results in a successful forfeiture, and; (2) The Safe Harbor Policy for Voluntary Self Disclosure Made in Connection with Mergers and Acquisitions, which entitles acquiring companies that qualify to a presumption of criminal declination should information related to criminal conduct be discovered during the course of M&A transactions.
In addition, in February 2024, DAG Lisa Monaco announced enhanced penalties for fraud involving the misuse of artificial intelligence and on Sept. 23, 2024, DOJ updated its Evaluation of Corporate Compliance Program guidance, which was first published in 2017. See https://www.justice.gov/criminal/criminal-fraud/page/file/937501/dl?inline. This guidance sets out the factors prosecutors consider when evaluating the compliance program of a corporation facing a criminal enforcement action, and the 2024 key additions include new criteria to evaluate how companies are managing risks related to using new technology like artificial intelligence; whether companies have adequate policies and training that encourages whistleblowers and prevents retaliatory conduct; sufficiently resourced and funded compliance programs with adequate and efficient access to data and analytical tools; training that evolves as issues come to light both internally and across the nation; and post-transaction integration.
DOJ POLICIES DURING 2025 AND BEYOND
DOJ's priorities and policies will no doubt change under the new administration. While President-elect Trump has not commented specifically on corporate crime or the importance of corporate compliance programs, he has openly criticized the current DOJ's handling of certain cases and announced his intention to form the "Department of Government Efficiency" to streamline spending and operations of the federal government. Accordingly, "pilot" programs that require a financial commitment from DOJ like the relatively new policy that allows for government-funded rewards to corporate whistleblowers could be among the first to be revised or removed under a new AG and DAG. On the other hand, longstanding policies that more generally govern the criteria for evaluating the effectiveness of a corporate compliance program and that establish the factors for prosecutors to consider in deciding whether to prosecute corporations have evolved under multiple administrations over the past 25 years. These policies are less likely to undergo significant revisions during a new administration.