There’s no denying that the Department of Justice’s response to the financial crisis of 2008 was underwhelming. Despite seemingly widespread fraud in the market for mortgage‐backed securities, the Department secured only one conviction of a Wall Street executive. The near‐total absence of prosecutions proved publicly embarrassing—and politically costly—to the Department. As criminal statutes of limitation expired, major media outlet after major media outlet published exposes on Wall Street leaders’ apparent immunity from prosecution.
Against this backdrop, the Department understood that it would need to strike back, and in a big way. Enter the “Yates Memo” in September 2015. Henceforth, Deputy Attorney General Sally Yates announced, corporate crime prosecutors would focus on securing accountability—in the form of criminal prosecutions—for culpable individuals within business organizations. Yates paired the Memo’s release with a public relations campaign. In a speech at the New York University School of Law, she described the Memo as “a substantial shift from our prior practice.” Responding to criticism of the Department’s post‐financial crisis performance, Yates told the New York Times that, “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.”
This Essay proceeds in three parts. Part I places the Yates Memo in context. Part II then sets forth the legal case that the Memo’s threshold requirement likely violates the legislative rule doctrine of administrative law. Part III turns from the doctrinal to the normative, explaining why the legislative rule objection to the Yates Memo serves a useful social purpose. This Essay concludes by considering the broader implications of the Yates Memo’s likely unlawfulness.
Before I begin, an important caveat is in order. This Essay contains no critique of the policy underlying the Yates Memo. The Yates Memo may possess the right strategies to combat corporate crime, or critics may be right that its requirements will prove to be counterproductive or unfair. Such questions lay beyond the Essay’s scope. My claim is narrower, but more fundamental. If the Department of Justice is going to pursue a threshold disclosure requirement for corporate criminal investigations, it should abide by the APA.