Have Wall Street executives been getting off too easily?

Federal attorneys will apply heightened scrutiny to individuals on Wall Street when investigating financial misconduct and corporate malfeasance, according to a new Justice Department policy.

Jessica Hill/AP/File
Attorney General Loretta Lynch speaks in East Haven, Conn., July 21. The Justice Department issued new guidance to its prosecutors on Wednesday aimed at encouraging more white-collar criminal cases against corporate executives. The new guidance – issued in the first year of Attorney General Loretta Lynch's tenure – mandates that corporations turn over evidence against individuals if they want credit for cooperating with the government.

New guidelines from the US Justice Department shows an increased focus by the law enforcement agency to take on white-collar criminal and civil cases against corporate higher-ups.

Since the mortgage crisis that sent the country's economy into a tailspin, the Justice Department has come under repeated criticism for sidelining cases having to do with the executives who may have initiated the collapse with financial misconduct and corporate malfeasance.

A new memo released to department's attorneys and the FBI, as well as a policy prescription speech that will be delivered by Deputy Attorney General Sally Quillian Yates on Thursday, aims to tackle these concerns head on.

While it's unclear yet whether it will result in an increased number of prosecutions, what the policies are designed to do is target individual executives who make the decisions that lead to large-scale fraud or wrongdoing.

“Corporations can only commit crimes through flesh-and-blood people,” Ms. Yates said in an interview with The New York Times. “It’s only fair that the people who are responsible for committing those crimes be held accountable. The public needs to have confidence that there is one system of justice and it applies equally regardless of whether that crime occurs on a street corner or in a boardroom.”

Under the new policies, corporations must turn over evidence of wrongdoing by individuals within the organizations if they want credit for cooperating with the government. The guidelines also direct attorneys to gather as much evidence against individuals as possible before concluding their investigations.

Additionally, the department is charging its civil and criminal prosecution staff to work together during corporate investigations, and focus on individuals in the probes. According to the memo, the department will also shy away from shielding individuals from liability during corporate settlement meetings.

"Our mission here is not to recover the largest amount of money from the greatest number of corporations; our job is to seek accountability from those who break our laws and victimize our citizens. It's the only way to truly deter corporate wrongdoing," Yates will say in her speech according to prepared remarks.

"The public expects and demands this accountability. Americans should never believe, even incorrectly, that one's criminal activity will go unpunished simply because it was committed on behalf of a corporation."

The new guidelines come early in the tenure of Attorney General Loretta Lynch, and seem to address the public backlash against her predecessor Eric Holder, for letting individual executives slide in the department’s larger efforts to extract cash from corporations.

For example, the record $8.9 billion penalty levied on French bank BNP Paribas in June 2014 for violating US sanctions resulted in no criminal criminal charges against individual bank executives.

Brandon L. Garrett, a University of Virginia law professor and the author of the book “Too Big to Jail: How Prosecutors Compromise With Corporations” told the New York Times the new policies are good, but questions how effective the department will follow through with them without additional resources.

Still, Yates said individual accountability is important to saving money in the future by deterring crimes and promoting "the public's confidence in our justice system."

This report contains materials from The Associated Press.

of stories this month > Get unlimited stories
You've read  of  free articles. Subscribe to continue.

Unlimited digital access $11/month.

Get unlimited Monitor journalism.