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Internal Investigations: Top 10 “Dos”

Corporate Counsel Women of Color Career Strategies Conference September 25, 2019. Internal Investigations: Top 10 “Dos”. Lorraine Campos, Crowell & Moring Estela Diaz, Akin Gump Strauss Hauer & Feld Marla Tun Reschly, K&L Gates Natashia Tidwell, Hogan Lovells. Top 10 “Dos”

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Internal Investigations: Top 10 “Dos”

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  1. Corporate Counsel Women of Color Career Strategies Conference September 25, 2019 Internal Investigations: Top 10 “Dos” Lorraine Campos, Crowell & Moring Estela Diaz, Akin Gump Strauss Hauer & Feld Marla Tun Reschly, K&L Gates Natashia Tidwell, Hogan Lovells

  2. Top 10 “Dos” Consider the impetus to conducting the investigation Determine the goal Define the nature of the investigation/investigator Develop the investigation plan Preserve documents Collect and review key documents Interview witnesses Research and analyze Draft investigation report Make recommendations/close out

  3. The “Why” of the Investigation . . . Hot line tip Customer complaint Competitor complaint Request for information from the US Government Subpoena Routine internal audit Media inquiry Whistleblowers

  4. Top 10 “Dos” Consider the impetus to conducting the investigation Determine the goal Define the nature of the investigation/investigator Develop the investigation plan Preserve documents Collect and review key documents Interview witnesses Research and analyze Draft investigation report Make recommendations/close out

  5. Taking into account business considerations . . . what is the goal? Discover the facts Discover the cause Maintain privileged investigation/associated work product Implement corrective actions Minimize disruption to the business Minimize scope of enforcement action Determine disclosure obligations Avoid criminal referral/prosecution Minimize effect on any parallel private civil litigation

  6. Top 10 “Dos” Consider the impetus to conducting the investigation Determine the goal Define the nature of the investigation/investigator Develop the investigation plan Preserve documents Collect and review key documents Interview witnesses Research and analyze Draft investigation report Make recommendations/close out

  7. Critical threshold considerations • Privilege issues • In-house investigations/security, in-house counsel v. outside counsel • Choose the right investigator • Credibility and viability as witness if testimony is needed

  8. Top 10 “Dos” Consider the impetus to conducting the investigation Determine the goal Define the nature of the investigation/investigator Develop the investigation plan Preserve documents Collect and review key documents Interview witnesses Research and analyze Draft investigation report Make recommendations/close out

  9. Building blocks for the investigation • Building and managing a team • Information gathering and scoping • Preserving, collecting, and reviewing documents • Conducting interviews • Background research/reports • Legal research and analysis • Client management • Public relations

  10. Other considerations • External claims / regulators • Criminal, civil, administrative regulators • Whistleblowers • Shareholder / derivative / civil suits • Auditors • Remediation • Personnel • Policies, procedures, controls • #MeToo • Passage of time/historical allegations • Due Process considerations

  11. Top 10 “Dos” Consider the impetus to conducting the investigation Determine the goal Define the nature of the investigation/investigator Develop the investigation plan Preserve documents Collect and review key documents Interview witnesses Research and analyze Draft investigation report Make recommendations/close out

  12. Document preservation • Distribute Hold Notice ASAP • To all holders of potentially relevant information • Evaluate IT Dept capabilities and develop most cost-effective means of preserving and producing responsive information • Electronic data challenges – volume, metadata, “imaging” of computers, devices • Keep records to show what you produced, when you produced it, and how it was produced

  13. Document preservation (cont.) • Destruction of documents/data is a worst-case scenario • Obstruction punishable by up to 20 years in prison (18 U.S.C. § 1519) • “Anticipatory” obstruction – “in contemplation of …” • Destruction can be used to establish intent for underlying crime • Adverse inference in civil litigation • Recent Boeing example

  14. Top 10 “Dos” Consider the impetus to conducting the investigation Determine the goal Define the nature of the investigation/investigator Develop the investigation plan Preserve documents Collect and review key documents Interview witnesses Research and analyze Draft investigation report Make recommendations/close out

  15. Documents can be outcome-determinative • Identify types and custodians • Consult with e-discovery professional • Triage and review • Forensic capture and analysis

  16. Top 10 “Dos” Consider the impetus to conducting the investigation Determine the goal Define the nature of the investigation/investigator Develop the investigation plan Preserve documents Collect and review key documents Interview witnesses Research and analyze Draft investigation report Make recommendations/close out

  17. Interviews . . . Maintain the Privilege • Performed by attorneys • Performed by non-attorneys at the direction of attorney(s) • Should document • Must be active direction • Be careful in foreign jurisdictions • Not always privilege for in-house counsel

  18. Interviews – Preserving the Privilege • Upjohn warning • Everything said is confidential • Should not discuss with anyone • Can discuss underlying facts • Represent the company not the individual • Company can choose to waive • Document interview and that warning was provided • Document that not an exact transcription and contains mental impressions • Impact of Yates memo

  19. Top 10 “Dos” Consider the impetus to conducting the investigation Determine the goal Define the nature of the investigation/investigator Develop the investigation plan Preserve documents Collect and review key documents Interview witnesses Research and analyze Draft investigation report Make recommendations/close out

  20. Now step back . . . • Legal research • Applicable standard of proof • Meet with client before preparing final report • Identify exposure to company – best case/worst case • Reporting obligations and other implications

  21. Top 10 “Dos” Consider the impetus to conducting the investigation Determine the goal Define the nature of the investigation/investigator Develop the investigation plan Preserve documents Collect and review key documents Interview witnesses Research and analyze Draft investigation report Make recommendations/close out

  22. The Investigation Report • Competing interests of privilege and transparency • Purpose = to provide legal advice/analysis • Limit distribution of privileged report • Development of sanitized “facts only” secondary report • Shared with prosecutors and regulators

  23. Top 10 “Dos” Consider the impetus to conducting the investigation Determine the goal Define the nature of the investigation/investigator Develop the investigation plan Preserve documents Collect and review key documents Interview witnesses Research and analyze Draft investigation report Make recommendations/close out

  24. Disclosing the Investigation Results • Disclosures to Government • Principles of Federal Prosecution/U.S. Sentencing Guidelines • SEC Seaboard Standards/Incentives • Potential Government intervention in qui tam actions • SOX: public company + material = disclosure mandatory • FAR mandatory disclosure requirements • Sanctions/export controls disclosure requirements • SAR filings for AML violations • Other disclosures • Board of Directors • Outside Auditors

  25. What Prosecutors/Regulators Expect • Responsiveness • Candor • If company states it’s cooperating • Full disclosure of the facts • Facts about Individuals (Yates memo) • Mitigation/Restitution • Remedial Efforts

  26. Rules to live by

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