Attorney General Loretta Lynch is on the Wall Street warpath and looking for scalps.
The nation’s top cop has launched a new crackdown on corporate fraud that focuses on prosecuting individuals for misdeeds rather than letting companies get away with paying a fine.
The Department of Justice sent a memo on Wednesday instructing federal prosecutors across the country to pursue individuals regardless of their position or pocketbook.
Deputy Attorney General Sally Q. Yates, who wrote the memo, stressed that individuals should be pursued regardless of their position or pocketbook.
“Crime is crime,” Yates said during a speech Thursday at the New York University School of Law. That’s “regardless of whether they commit their crime on the street corner or in the board room.”
The new policy effectively buries the legacy of Lynch’s predecessor, Eric Holder, who reaped hundreds of billions in fines from banks but couldn’t find any top banking executives to put in prison.
Further, companies would only be given leniency during an investigation if they hand over all their records relating to individuals suspected of wrongdoing no matter how senior they are.
“It’s all or nothing,” Yates said during the speech. “No more picking and choosing which facts to disclose, no more partial credit.”
She compared the new white-collar crime approach to a drug dealer who rats out his friends to get a plea agreement. If that drug dealer doesn’t give up his information on the cartel boss, she said, the DOJ will rip up the deal.
“While this is new of the corporate world, there’s really nothing radical about this concept,” she said.
The memo, which was first reported by The New York Times, gives a nod to the difficulty of prosecuting individuals on Wall Street, “where responsibility can be diffuse and decisions are made various levels.”
“Prosecuting senior corporate executives is difficult,” said Matthew L. Schwartz, partner at Boies Schiller & Flexner.
“It is a promise to the business community that the DOJ will pursue individual accountability even if the evidence is sparse and the case is challenging — and even if there’s a good chance that a judge or a jury will disagree with the DOJ.”
