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Directors and Officers Personally Accountable Under DOJ’s New Policy
March 6, 2023
A recent plea agreement between the DOJ and Danske Bank, a global financial institution, contains provisions that tie executive compensation and bonuses for the company’s executives to future compliance efforts. It follows statements that companies will be expected to claw back compensation from executives who engage in misconduct, and is indicative of how aggressive the DOJ will be in holding corporate executives personally accountable for compliance. Danske Bank was charged with defrauding U.S. banks. In January a judge approved the plea agreement, and sentenced Danske Bank to three years’ probation and forfeiture of $2.06 billion. The agreement signals the DOJ’s return to the focus on individual accountability that was announced in 2015, when then-Deputy Attorney General Sally Yates issued a memo entitled “Individual Accountability for Corporate Wrongdoing.” The Yates Memo stated that target companies must reveal “all individuals involved in or responsible for the misconduct at issue, regardless of their position, status or seniority” and provide “all facts relating to that misconduct” to qualify for any cooperation credit. Yates’ successor, Rod Rosenstein, changed the policy. He limited mandated disclosure to those individuals “substantially involved in or responsible for” misconduct to qualify for cooperation credit. Current Deputy Attorney General Lisa O. Monaco issued two memos about individual accountability. In 2021, she essentially reinstated the Yates policy. In a November 2022 memo, Monaco emphasized that companies must make timely disclosures to receive credit.
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