This article originally appeared in Corporate Counsel

internal-investigationFive years ago, the U.S. Justice Department announced that it had charged GlaxoSmithKline Vice President and Associate General Counsel Lauren Stevens with two counts of obstruction of justice and four counts of making false statements to the Food and Drug Administration (FDA). At issue were allegations that Stevens had sent a series of letters to the FDA denying that the company had promoted its drug Wellbutrin for off-label uses and that she failed to turn over evidence to the contrary, including various slides used by physicians paid by the company to promote the drug’s off-label use.  

News of Stevens’ Indictment rocketed through the ranks of corporate counsel nationwide, not simply because the Justice Department opted to pursue criminal rather than civil sanctions for the manner in which GlaxoSmithKline conducted itself during the FDA’s investigation, but also because it chose to prosecute Stevens individually for the conduct instead of the company. Indeed, the stakes for Stevens could not have been higher – she faced a maximum of 60 years in prison if convicted.   

Now, five years later, a shift in Justice Department policy placing greater emphasis on individual accountability for corporate wrongdoing has raised the stakes for corporate counsel once again. In what has become known as the “Yates Memo”, Deputy Attorney General Sally Quillian Yates outlined six steps to strengthen the Department’s pursuit of individual wrongdoing in corporate investigations:

  1. In order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct;
  2. Criminal and civil corporate investigations should focus on individuals from the inception of the investigation;
  3. Criminal and civil attorneys handling corporate investigations should be in routine communication with one another;
  4. Absent extraordinary circumstances or approved departmental policy, the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation;
  5. Department attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and
  6. Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.

In this renewed era of individual responsibility for corporate malfeasance, corporate counsel would be well advised to help protect themselves from personal liability.

Coming Soon – Part 2: Six Steps Corporate Counsel Must Take to Protect Themselves during Government Investigations

Christopher D. Carusone is a Partner in the Firm’s Harrisburg office, where he serves as Chair of the Firm’s Government Law & Regulatory Affairs and Energy & Utilities Groups, as well as Co-Chair of the Internal Investigations Group.

Paul S. Thaler is the Managing Partner in the Firm’s Washington, D.C. office, co-chair of the Internal Investigations Group, and a member of the ADR and Commercial Litigation Groups.