Davis Polk discusses Appellate Reversal of $1.3 Billion Penalty Against Countrywide, Based on Appellate Finding of Lack of Intent

On May 23, 2016, the United States Court of Appeals for the Second Circuit reversed a $1.3 billion civil penalty imposed against Countrywide Home Loans, Inc., Bank of America, N.A., and related defendants (collectively, “Countrywide”) under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”).[1]  Although the decision rebuffed the government’s case against Countrywide, it did not address the government’s novel interpretation that FIRREA permits civil penalties against financial institutions whose criminal conduct is “self-affecting.”  FIRREA permits civil penalties against a defendant if it commits certain unlawful acts “affecting a federally insured financial institution.”[2]  Over a … Read more

Davis Polk explains DOJ Incorporation of Yates Memo’s Focus on Individual Prosecutions into U.S. Attorneys’ Manual

On November 16, 2015, Deputy Attorney General Sally Quillian Yates gave a speech[1] regarding the implementation of the Department of Justice’s recent policy initiatives to facilitate the prosecution of individuals in corporate cases outlined in the “Yates Memo,” issued on September 9, 2015. These policy initiatives have now been incorporated into the U.S. Attorneys’ Manual (the “Manual”), with the most significant changes made to the section covering the Principles of Federal Prosecution of Business Organization (the “Filip Factors”). As Ms. Yates explained, the revisions:

  • Emphasize “the primacy in any corporate case of holding individual wrongdoers accountable”;
  • List a variety

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