The Role of Internal Investigations in Crisis Management for New York Corporations

Lesley Brovner & Mark Peters
December 10, 2025

When a crisis hits your corporation, the first thing to do is learn the all the facts so that you understand the scope of the issue across the corporate landscape and can determine whether laws, regulations, or policies have been violated. Once this is done, you can take steps to discipline wrongdoers and create policies to prevent a recurrence. A thorough internal investigation will allow you to properly respond to law enforcement and regulators, improve internal procedures and manage reputational risk.

Understanding the Importance of Internal Investigations in Crisis Management

Without an internal investigation you are managing your crisis in the dark. To address wrongdoing, hold violators to account, make those who were wronged whole and move forward with the important business of your corporation or nonprofit, you need to fully understand what you are dealing with. Moreover, a thorough investigation can be helpful in showing government regulators and stakeholders that you are taking the situation seriously and being proactive in dealing with it.

Legal and Regulatory Considerations for New York Corporations

There are a myriad of legal and regulatory considerations to be dealt with in conducting any investigation.

Perhaps the most important is the question of privilege – the legal right to withhold attorney client communications and work product.  While you may ultimately decide that you want to release a report on an internal investigation (either to reassure stakeholders or to demonstrate good faith with regulators) that is a decision that you may not be prepared to make at the outset of the process.  As such, experienced investigatory counsel will design the investigation to protect the right to keep the report confidential to the maximum extent allowed by the law.

Another issue to consider is the rights of the employees involved and at times under investigation.  Generally, employees shouldn’t have an expectation of privacy in work computers and emails (especially if that is made clear in properly drafted employee handbooks) but care should be taken when gathering employee emails and documents without their knowledge or consent.

Finally, putting accusations against employees in writing can lead to potential lawsuits from employees who feel they were defamed or wrongfully disciplined.  So, one must be cautious about what is put in writing, particularly if individuals are named.

Conducting Transparent and Effective Employee Interviews

The first thing to remember when conducting employee interviews is that the investigative attorneys doing the interviews work for the corporate entity and not for any individual employee. Indeed, in any interview of any employee, this point must be made clear at the outset. Not only is this legally required, but being upfront about the investigator’s status at the outset can help set a tone of honesty and candor throughout the interview.

Also, employee interviews should only take place after a careful review of the documents available, as these documents can provide a great deal of the relevant story; allowing interviews to fill in the holes and provide context or explanation for those documents.

Finally, it is important to have clear guidelines for how the interviews are to be conducted and the process used so that there is no perception of favoritism in the conduct of interviews.

Mitigating Legal and Financial Risks

A proper internal investigation can help mitigate both legal and financial risks. To begin with, the investigation will alert you to exactly what those risks are, which allows you to take proactive steps before any lawsuit or regulatory action has started. Even once the lawsuit or regulatory action has begun, the investigation will give you a sense of the scope of the problem so that you can begin to marshal a proper defense, remedy and wrongdoing, and proactively work to mitigate the risk of future misconduct.

Some of the specific risks that an investigation will help manage are:

Financial risks:

• If you are out of compliance the government can impose harsh penalties on your organization. Dealing with those penalties can be costly and time consuming.
• Also, if your lack of compliance becomes public – either because of a private lawsuit or government investigation – the reputational harm that you suffer can be costly to your business or nonprofit.

Legal risks:

• Rules and regs exist for a reason and if you are out of compliance, you could be endangering the health, safety and welfare of employees, customers and others who come into contact with your company. This can also expose you to civil liability.
• Violation of the rules can also lead in some cases to criminal liability and/or to regulatory fines or bans on future work, both of which can be debilitating for the company in question.

Communicating with Stakeholders During a Crisis

In a corporate crisis, it is crucial to communicate with the various stakeholders so that they can operate from a basis of fact and not rumor. A thorough internal investigation helps with this by delineating the facts.

In using the facts gained from an internal investigation, it is important to have comprehensive strategic communications that helps to manage the media if there is any, inform employees of any developments before they hear about it from third parties and maintain good will from stakeholders. At the same time, all of this must be accomplished keeping legal risk and obligations in mind – making sure that the communications strategy does not create legal pitfalls that will haunt an entity down the line. An internal investigation that involves both factfinding and legal review will help do this.

Implementing Corrective Actions to Restore Trust

Once your organization has an understanding of what went wrong, it is vital that you implement a corrective action plan. A corrective action plan is a step-by-step guide to how to fix what went wrong and prevent it from reoccurring in the future. To draft such a plan, investigative counsel will not only need to have done a thorough investigation of the facts on the ground but also a review of the relevant industry rules, regulations, policies, laws, and standards – to make sure that the corrective action plan addresses all of these. The corrective action consists of (a) addressing the specific misconduct that occurred and (b) creating a comprehensive compliance plan to prevent future misconduct.

A compliance plan should do the following:

• Outline a set of guidelines and best practices that ensure a company’s employees are following all relevant laws and regulations.
• Create a training program on those guidelines.
• Create a system of ongoing monitoring to ensure the guidelines are followed.
• Provide for optimal communication between employees and those who oversee the program.

Contact Peters Brovner Today!

The investigative attorneys at the law offices of Peters Brovner LLP have decades of experience conducting complex criminal and civil investigations. Before founding Peters Brovner LLP, Lesley Brovner and Mark Peters served as First Deputy Commissioner and Commissioner of New York City’s Department of Investigation (“DOI”), one of the oldest law enforcement agencies in the country. At DOI, they oversaw the Inspectors General for all New York City agencies and oversaw hundreds of investigations that resulted in criminal prosecutions and major agency reforms.

Prior to DOI, Lesley was a prosecutor for many years at the New York State Attorney General’s Office where she focused on complex, white collar investigations and Mark was chief of the public corruption unit at the Attorney General’s Office.

If you or someone you know is interested in having an internal investigation conducted, please reach out to the lawyers at Peters Brovner LLP for a consultation.