In a recent set of guidelines, the Department of Justice told prosecutors that they should focus more on the crimes of corporate executives on Wall Street.
The shift in policy was made among critics that the DOJ failed in many cases to request prosecution of bankers with blatant financial misconduct, and it wasn’t aggressive enough when negotiating the terms of billion-dollar settlements with large financial institutions.
And the situation was observed on various occasions after the great financial crisis.
The new guidelines were issued this week through a memo addressed to DOJ prosecutors and the Federal Bureau of Investigation, though they were slated to be disclosed Thursday in a speech at the New York University.
Although the odds of white collar criminals to be prosecuted are not clear, the recent move is designed to show that the department is actively engaged in bringing high-level executives to justice and discouraging corporate fraud.
Deputy Attorney General Sally Quillian Yates acknowledged that bringing those individuals to justice was a “challenging” endeavor, but the department’s job was to overcome the challenges and make sure that justice would be done.
Ms. Yates reassured the American public that criminal activities made by Wall Street bankers wouldn’t go unpunished because they were made behind an executive board of a corporation.
The new directives urge large financial entities to hand over to prosecutors any evidence of corporate misconduct that led to financial fraud and economic instability. Corporations are also encouraged to cooperate with federal investigators during investigations, while prosecutors are asked to get as many data on responsible execs as possible before closing a case.
The DOJ also suggests investigations should focus on individuals who should be the ones held accountable for corporate crimes rather than on the abstract concepts called corporations. The guidelines also reveal that the DOJ would not tolerate any settlements that shield individuals from liability.
Ms. Yates also said that the DOJ’s job was not to recover the heaps of defrauded money by large financial institutions. Instead its prosecutors should focus on seeking the individuals behind those crimes and bring them to justice.
“It’s the only way to truly deter corporate wrongdoing,”
Ms. Yates concluded.
The shift in policies may be an attempt of Attorney General Loretta Lynch to fix the mistakes of her predecessor Eric Holder who was criticized that he wasn’t aggressive enough in holding accountable the real culprits of the 2008 financial crisis including JPMorgan Chase, Bank of America, and Citigroup.
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