Standards & Guidance
US prosecutors curbed when investigating corporate fraud
US federal prosecutors have been given new restraints on
how they investigate alleged corporate wrongdoing, with the
US Department of Justice (DoJ) issuing
new guidance
on the controversial
Thompson
Memorandum.
The memorandum consists of nine guidelines prosecutors
must follow when deciding whether to bring corporate indictments, and instructs
companies to reward companies that freely provided confidential information and
censure those who do not. These censures can be used as a basis to seek an
indictment.
The new guidance requires prosecutors to first establish
a legitimate need for privileged information, and then seek approval before they
request it. It also cautions that attorney-client communication should only be
sought in very rare situations. If a company does not provide attorney-client
communications in the first instance, or continues to pay employees’ legal fees,
prosecutors are instructed not to consider this declination when deciding
whether to bring charges.
Paul McNulty, deputy attorney general, said the new
guidance is intended to encourage self-policing among companies.
However, an editorial in the
Financial Times (FT, 20 December) feared that prosecutors may reward
companies that do disclose communications with their lawyers which would
therefore penalise the other companies. The FT suggested US legislators needed
to keep an eye on its prosecutors and step in where necessary to eliminate
abuses, the FT believes had occured in recent years.
Links
US Department of Justice
Principles of
Federal Prosecution of Business Organizations
Thompson
Memorandum
Financial Times
January, 2007 |
