David Massey on the Move to Perkins Coie and Corporate Crime Enforcement in the Age of Biden

With sixteen of his colleagues, David Massey last month made the move from Richards Kibbe & Orbe to Perkins Coie in New York.

David Massey

“Perkins Coie approached Richards Kibbe about the possibility of some kind of combination,” Massey told Corporate Crime Reporter in an interview last month. “There came a time when that option appeared to be a strong one for the litigation group. We took that opportunity and have now joined.”

Was it a friendly split?

“It was and is a friendly split. The corporate partners who remained at the firm – renamed Kibbe & Orbe – are still very good friends. It was an amicable split. They are remaining independent.” 

What are the benefits of being at a bigger firm?

“This particular bigger firm is a perfect fit in terms of culture and practice. It’s an excellent cultural fit. We are a client focused, practical, no nonsense group of litigators. We describe ourselves as lean and mean. We don’t overstaff matters. We find practical solutions for clients. And it was important for us to find a firm that has a very good and similar culture. The inclusive nature of their culture fits very closely with ours.” 

“In terms of practice, we tend to be very financial services focused. And Perkins Coie has that along with a technology focus representing firms like Boeing, Amazon, Microsoft, Google, Intel and a lot of smaller startup technology companies.” 

“We have seen over the years a convergence between financial services and technology. We brought strength in financial services. They have great strength in technology. And that made for a perfect fit for us.”

Massey sees an uptick in corporate crime cases under the Biden administration.

“I anticipate an uptick in white collar and corporate crime enforcement. The Trump administration was focused on other areas like immigration and in the securities area, retail focused investigations.” 

“The Securities and Exchange Commission (SEC) chair is Gary Gensler. That’s a traditional and aggressive white collar enforcement pick. The Consumer Finance Protection Bureau (CFPA) pick Rohit Chopra is also considered an aggressive enforcement pick.” 

“The dysfunction of the Department of Justice we have seen over the past four years will disappear overnight once you put these professionals in place and you remove the constant distraction of not one but two impeachments. And a constant threat of tweets, dysfunction and interference in cases at the sentencing or pardon level. Normalcy will be restored.”

Next week, we will be interviewing Columbia Law Professor John Coffee. He has a new book out titled Corporate Crime and Punishment. He argues that the Trump administration moved away from significant policies to hold individuals responsible, including the Yates memo. 

Will the Biden administration move back toward the Yates memo?

“The short answer to that is probably yes. The Yates memo, as revised by Rod Rosenstein, is still in effect. There always has been and there always will be a heavy emphasis on prosecution of individuals in corporate enforcement matters.”

“But you cannot underestimate the return of normalcy in the Department of Justice’s operations and the removal of the constant distraction at the top and the ability of people to just do their jobs without interference.”

“Here is a practical way that that matters. One thing that is a feature of Main Justice is the constant need for meetings and consensus and the importance of a leader at the Fraud Section. If you have a strong credible person who feels they have support of the higher ups and  who can get a hearing with higher ups when he or she needs it, that’s a recipe for aggressive enforcement and programmatic enforcement.” 

“That all requires a well functioning department, it requires people who feel they have authority and have the backing of people above them and where the people above them are not being distracted by other things.”

“That was all disrupted in the Trump administration. The head of the Fraud Section was an acting and not permanent. You had this constant distraction and dysfunction that made it impossible for people to just do their jobs and to be aggressive in their jobs.”

Professor Coffee writes this: 

“The Yates Memorandum took a deliberately all-or-nothing position: to receive credit for cooperation (which includes qualifying for a DPA), the corporation had to identify every individual involved in the misconduct. In a November 29, 2018 speech, Deputy Attorney General Rod J. Rosenstein relaxed and modified this policy, expressly ending its all-or-nothing character. As he stated, ‘Our revised policy . . . makes clear that any company seeking cooperation credit in criminal cases must identify every individual who was substantially involved in or responsible for the criminal conduct.’ Numerous corporate law firms circulated memos to clients, emphasizing and applauding this change.”

Do you see this as an important change?

“I don’t,” Massey said. “With each stage of the Yates memo, sometimes the commentary on it goes a little bit too far in terms of seeing a sea change. The original Yates memo was not as big of a sea change as advertised.” 

“When I was at the Southern District of New York, the prosecution of individuals was first and foremost in everybody’s mind every single day. When companies cooperated, they always had to provide all facts about all individuals in order to get any cooperation credit. There was no world where a company could come in and say – we are going to feed you all of the information, investigate and tell you everything about everyone except the CEO and we hope to get eighty percent cooperation credit for that. That wouldn’t have gone anywhere.”

“When the Yates memo came out and said – in order to get any cooperation credit, you had to provide all of the relevant facts, that was not really a change for many districts around the country.”

“There is an asterisk here. Let’s say a company had some category of wrongdoing where there were 200 people who did something wrong. If the 200th person was regarded as immaterial, or it was too difficult to provide information about them or it really wasn’t necessary, assuming the 200th person is not the CEO, you could go forward with cooperation even in the absence of every shred of information about every person. That’s where the substantial/material qualification was added. It just reflected the reality that it is not always possible to uncover every scrap of evidence about every single person. But every scrap about every material person or substantially involved person was always required to be disclosed as part of corporate cooperation.”

Professor Coffee and Judge Jed Rakoff are pretty critical of the use of deferred and non prosecution agreements to settle corporate crime cases. 

“These agreements have been around since at least the mid 1990s. I’m a big believer in the use of deferred prosecution agreements and at times non prosecution agreements for companies where it is warranted. It should be paired with aggressive prosecution of individuals and it often is paired with aggressive prosecution of individuals.”

“Much of the criticism of the deferred and non prosecution agreements grows out of Foreign Corrupt Practices Act (FCPA) enforcement. At times, you did see settlements and big dollars paid by corporations with very little to show in terms of individual prosecutions. You can point to those cases. But you can just as readily point to cases where there is individual accountability.”

“I was involved with the FIFA case – the world soccer corruption matter. Dozens of individuals were indicted, many overseas, including the CEO of a company in South America called Torneos. His name is Alejandro Burzaco. We were retained to represent Torneos in June of 2015. And Torneos immediately decided to cooperate and remediate, put in place new leadership and begin a fairly arduous road of cooperation.” 

“After that point, more individuals were charged. And eventually, Torneos was ultimately rewarded with a deferred prosecution agreement. They paid a stiff penalty, but they recently completed the deferred prosecution agreement and got a glowing review from the lead prosecutor and from the judge. The cooperation and remediation were described as extraordinary. And the company was rewarded for turning itself around and becoming a model for other companies. And it is actually using its cooperation outcome as a marketing advantage in the local market where various multinational players want to see they are working with a company that is fully remediated and are not going to be exposed to any possible risk.”

“What you have in the end is full accountability for the individuals, the former CEO and others, and accountability at the corporate level. So for every example that can be cited where an individual wasn’t prosecuted, there are plenty of examples where the individuals were prosecuted.’

[For the complete q/a format Interview with David Massey, 35 Corporate Crime Reporter 6(12), Monday February 8, 2015, print edition only.]

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