New Justice Dept. policy aims to get tough on Wall Street fraud

September 13 23:57 2015

The Justice Department issued a new policy Wednesday that made the prosecution of Wall Street executives involved in financial fraud a major priority, all but acknowledging nagging criticism that powerful corporate figures have escaped criminal charges in favor of giant monetary penalties.Wall-Street

“Effective immediately, we have revised our policy guidance to require that if a company wants any credit for cooperation, any credit at all, it must identify all individuals involved in the wrongdoing, regardless of their position, status or seniority in the company, and provide all relevant facts about their misconduct,’’ according to Deputy Attorney General Sally Yates’ prepared remarks for a Thursday speech at New York University Law School.

Yates’ prepared remarks elaborate on policy issued to federal prosecutors nationwide Wednesday, calling for federal authorities not to provide individuals “protection from criminal or civil liability,’’ absent extraordinary circumstances. “The rules have just changed,’’ Yates said. “Effective today, if a company wants any consideration for its voluntary disclosure or cooperation, it must give up the individuals, no matter where they sit within the company.’’

In the aftermath of the financial crisis and housing market collapse, Justice has long been criticized for failing to target executives who presided over the rampant fraud that facilitated the crises. “Corporate matters cannot be resolved without clear plan to resolve cases against individuals and all decisions declining to prosecute potential culpable individuals must be approved by the U.S. attorney of the head of the division handling the case,’’ according to the new Justice guidelines.