Aggressive Corporate Crime Approach Offers Little Protection

March 24, 2008 New Jersey Law Journal

This article is reprinted with permission from the MARCH 24, 2008 issue of the New Jersey Law Journal. ©2008 ALM Properties, Inc. Further duplication without permission is prohibited. All rights reserved.

In a previous article, we discussed charging business entities under the memorandum promulgated by the then Deputy Attorney General Paul J. McNulty (“McNulty Memorandum”), (Memorandum from Deputy Attorney General Paul J. McNulty entitled Principles of Federal Prosecution of Business Organizations (December 12, 2006), (Ernest Badway, “Is the McNulty Memorandum Fool’s Gold?” 191 N.J.L.J. 755). This article discusses the McNulty Memorandum and the criticism of the Department of Justice’s (“DOJ”) reliance upon corporate cooperation, including its requests to business entities to waive their corporate attorney-client and work-product privileges and provide DOJ investigators with information that otherwise would have been protected.

Much ink has been spilled in discussing the DOJ’s very aggressive approach towards corporate crime. However, the DOJ is not alone among government regulators in this fight and the waiver debate. For example, the United States Securities and Exchange Commission (“SEC”) has relied upon its Seaboard guidelines (Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934 and Commission Statement on the Relationship of Cooperation to Agency Enforcement Decisions, Exchange Act Release No. 44969 (October 23, 2001)) and others have promulgated standards to consider cooperation when making their charging decisions. (Douglas I. Koff and Jason Jurgens, “CFTC Yields More Conflicting Advice on Privilege Waiver,” New York Law Journal, April 13, 2007.)

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