Barry Pollack Discusses Potential Impact of Yates Memo on Enforcement Activity in Inside Counsel

"Hot under the collar"
Inside Counsel

Barry Pollack discussed the potential impact of Deputy Attorney General Sally Quillian Yates's recently released memorandum, encouraging Department of Justice (DOJ) prosecutors to focus attention on individuals who commit corporate wrongdoing rather than just business entities. "It will be interesting to look at what, if anything, will come out of the Yates memo. The DOJ offices are littered with memos from Deputy Attorneys General, just gathering dust, so it remains to be seen whether the Yates memo will result in an environment where a number of prosecutions are being brought. If we take it at its word, we'll see an uptick in individual prosecutions," Pollack said. While the memo has gotten people's attention, any meaningful change in corporate behavior remains unseen. "The truth is, most corporate executives do not set out to commit crimes; most are acting in good faith, so for the rare executive who is knowingly committing fraud, there might not be any deterrent that would work," Pollack said.

There has been increased enforcement in consumer protection and environmental law matters, with the government investigating food and auto safety, ranging from disasters in coalmines to salmonella found in peanut butter. "The DOJ decided that it wants to send a message that, if you are perceived as ignoring health and safety in a way that is putting the public at risk, it's not just an administrative and regulatory matter -- there will be criminal prosecutions, often with draconian sentences," Pollack said.

"The common theme here is a belief that, if you want to grab people's attention and change conduct, there is no substitute for criminally prosecuting individuals and sending them to jail;" however, it is rare for an executive to get hit with charges, Pollack said. "Federal white collar prosecutions are at a historically low level now, but even when they are at a high level, getting criminally prosecuted by the federal government is like getting hit by lightning. Other than causing some angst, it won't be a game changer in terms of how executives behave."

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