Rosenstein Announces New DOJ Policy for Corporate Cooperation Credit at FCPA Conference

Last Thursday, Deputy Attorney General Rod Rosenstein announced at a legal industry conference that DOJ would be updating its voluntary disclosure guidelines, walking back the all-or-nothing approach outlined in the Yates Memorandum, an earlier DOJ guidance memo, and creating the possibility for companies to receive partial cooperation credit when making voluntary disclosures. According to Rosenstein, the new approach aims to create a smarter policy for white collar enforcement in fraud and FCPA cases, preserving both the credibility of disclosure and valuable government resources. While companies should cheer the development, they would also be wise to understand the particulars.

Previous DOJ Guidance – the Yates Memo

In 2015, a memorandum from then-Deputy Attorney General Sally Yates, commonly referred to as the Yates Memo, provided detailed guidance on white collar law enforcement for government prosecutors. The most scrutinized of the memo's directives stated that, to be eligible for any cooperation credit, corporations needed to provide DOJ with "all relevant facts about the individuals involved in corporate misconduct." This included identifying "all individuals involved in or responsible for the misconduct at issue, regardless of their position, status or seniority." In theory, omission of even a single low-level employee could therefore destroy the possibility of cooperation credit. One goal animating the directive was to prevent companies from cherry-picking facts in order to guide the government's investigation in a direction more advantageous to the company. In practice, however, the Yates Memo produced a very different outcome. As members of the white collar bar reported soon after the directive was in place, the policy became a drag on self-reporting, holding up disclosure of key facts while investigators tried to track down low-level and less important players.

Updated Policy

DOJ seems to have taken heed of these reports. Rosenstein announced the change from what he termed the "binary" proposition of the Yates Memo. He stated that prosecutors will no longer take an "all-or-nothing" approach to cooperation. Instead, in corporate civil cases, DOJ prosecutors will have more discretion to offer partial cooperation credit as long as companies "meaningfully assist" in the government's investigation. The standard in criminal cases will also now allow for partial credit, but is stated slightly differently: "If the company is unable to identify all relevant individuals or provide complete factual information despite its good faith efforts to cooperate fully, the organization may still be eligible for cooperation credit." To receive credit, companies need only identify individuals "substantially involved in or responsible for the misconduct." Insertion of "substantially" further emphasizes the focus on high-level individuals.

Finally, in a procedural shift, the revised DOJ policy has been incorporated directly into the Justice Manual (formerly known as the United States Attorneys' Manual) at 9-28:700 ("The Value of Cooperation"). This is a change from the recent DOJ practice of promulgating new guidelines through memoranda named for their authors, and it may give the revisions more authority and offer them a chance at a longer bureaucratic life.


The updated policy is ostensibly designed to allow DOJ to implement a more efficient enforcement regime. Throughout his talk, Rosenstein referenced the Department's limited resources and the pragmatism of a smarter approach. The updates are also consistent with DOJ's efforts to continue to develop a more collaborative approach to white collar law enforcement, where the government incentivizes disclosure and works as a partner with corporate counsel. Rosenstein announced the changes alongside updated and purportedly more transparent FCPA disclosure guidelines that were also aimed at encouraging self-reporting.

But what will this ultimately look like in practice? How will the verbiage "substantially involved in misconduct" be interpreted by DOJ staff? In theory, the policy changes should make it easier for internal investigations to identify and report misconduct by eliminating the need to identify every employee engaged in criminal misconduct, no matter how attenuated their connection, and to reach dispositions even where a company is not eligible for the maximum cooperation credit. Whether this translates into practice remains to be seen.