Recently, Attorney General Holder and DAAG Marshall Miller from the Criminal Division delivered important speeches (See Holder Here and Miller Here) on the Justice Department’s initiative to increase individual criminal prosecutions.

The initiative was mainly political – the Department claimed that legislation was needed for one part of the proposal. The policy change announced by the Department was not really much of a change from current policy.

Cynics can easily write off the speeches as politics in response to continuing public concern that the Justice Department has shied away from individual criminal prosecutions in the financial sector. Attorney General Holder and the Justice Department are still paying the political price for claiming that some financial institutions “were too big to jail.”

The problem is much more evident when you consider the recent large case settlements – JP Morgan, HSBC, BNP Paribas and many others.   The general rule for criminal liability of a company is that a company can only be held criminally liable when at least one person in the company satisfies the elements of the offense and has the requisite intent to violate the law at issue. There are a few instances when the notion of “collective” intent is used to attribute criminal liability of a company by combining the states of mind of several actors but that is a doctrine that is rarely available.

The Justice Department’s claim that criminal legislation is needed to apply the Park doctrine in the financial services industry is a solution that is looking for a problem. The Park doctrine has been used by the Justice Department to hold senior executives in the pharmaceutical and medical device industries criminally liable for violations when the senior executive failed to exercise proper oversight and management of other employees who violated the law.

The Justice Department’s failure to prosecute individuals in the financial services industry is not because of weakness in the law. Plenty of Administrations before this current Administration were able to prosecute financial criminals individually and were successful. The problem in this situation may be a fear of pulling the trigger on some high-profile criminal defendants.

If you start with the basic notion of attribution of individual conduct to a company for criminal liability, the actions of at least one executive or employee satisfied the criminal elements and therefore could have been charged. My instincts tell me that prosecutors decided to avoid traditional and time-consuming grand jury investigations focused on individuals in favor of a quick and relatively easy company settlement.

Companies conducted internal investigations, reported the results to the prosecutors, and did not take time to identify individuals who could have been prosecuted. The government was happy to take the results of the company’s investigation, verify the accuracy of it with some light investigation steps, and then negotiate a settlement.

The government was happy to secure a large fine and avoid the labor-intensive work of building individual criminal cases — instead, the prosecutors were off to the next big target, huge fine and press release, rather than devoting time to holding individuals accountable.

I am sure prosecutors can identify a number of difficulties in prosecuting individuals, including statute of limitations issues, proof problems and the absence of strong intent evidence. But prosecutors have taken on tough cases and tough investigations before and brought cases when success was not guaranteed. That is the nature of the system and sometimes justice demands those types of prosecutions.

DAAG Miller’s speech about requiring companies to provide assistance in criminal prosecutions against corporate actors was a puzzling announcement. DOJ prosecutors already have the authority and ability to demand corporate cooperation against individuals and have used such cooperation in other cases to charge individuals (See e.g. BizJet).

Miller’s recent speech suggests that there was some restriction on the ability of prosecutors to use corporate cooperation for this purpose. That is flat out wrong. If the Justice Department intends to make such cooperation a more important factor in weighing corporate cooperation, that is a change of more form over substance.

The Justice Department’s failure to pursue individual prosecutions in the financial industry stands out as a great missed opportunity. It would have required dedication of resources during a time of DOJ budget strain, and it would have required policy directives demanding investigations of individuals using traditional criminal prosecution techniques. Instead, the Justice Department leadership pushed an agenda of quick hits for large fines, believing that would adequately deter companies from violating the law.   We shall see if that was the right call.