Corporate Investigations and White-Collar Defense: When to Find an Attorney
Lesley Brovner & Mark Peters
February 7, 2023
White Collar Defense and Investigations
In the current business environment, the way in which companies and their boards of directors investigate potential misconduct can affect that company’s reputation almost as much as the alleged conduct itself. Moreover, without understanding the full scope of the misconduct it is impossible to reckon with the issues that occurred, create a compliance program and prevent future problems.
Below are a number of issues that organizations should consider when determining whether to undertake an internal investigation.
Investigating Possible Misconduct
Internal Corporate investigations may be triggered by several factors, including:
• Inquiries from prosecutors such one of the New York City District Attorney’s Offices, the Southern or Eastern District U.S Attorney’s Offices of New York,
• Inquiries from enforcement agencies such as the New York State Attorney General, or any of the New York City or State Agencies.
• Companies sometimes require investigations before any government inquiry in an attempt to get ahead of a problem before it gains the attention of government regulators or prosecutors.
Internal corporate investigations may include investigations into employee misconduct as well as broader systemic failures to follow government regulations.
When to Call an Attorney
Companies that can benefit from an internal investigation include those:
• Facing criminal or civil investigation, including a grand jury investigation or other investigation by the government, law enforcement or a regulatory agency.
• Facing a potential public scandal
• In an industry where others are facing investigations by the government and want to get ahead of the curve.
• Companies that want to make sure that they are in compliance with all relevant laws, rules and regulations.
• Companies that want to ensure that they are in compliance with their own rules and regulations.
Does your firm require Crisis Management?
Crisis management involves the intersection of law and communications. When a law enforcement agency, other governmental regulator, or private civil litigant accuses an individual or entity of misconduct, it can be necessary to not only devise a legal strategy for defending the individual/entity in court, but also a public relations strategy to protect that individual/entity’s reputation more generally. If that is the case, it is important to hire an experienced crisis management team to deal with both tough litigation issues as well as managing media and public opinion more generally. In these circumstances, corporations often require a firm that can devise strategies that not only protect a client’s legal interests but also protect the client’s reputational interests.
Individual Representations vs. Corporate Representations
One of the first issues to establish at the outset of hiring a legal team is whether the lawyers will be representing an individual or the corporation as a whole. This should be set out in the engagement letter that the client signs when first hiring the lawyer. If the engagement letter states that the client is the corporation, then the lawyer’s conversations with individual employees may still be privileged, but the privilege (and the right to waive the privilege) belongs to the corporation and not to the individuals.
Where a lawyer is representing the corporation and interviews an individual officials within the company, the lawyer will explain this distinction up front, so that the individuals understand whose interests are being protected. These are commonly referred to as “Upjohn Warnings” after the Supreme Court case that first set out the rule that conversations can be privileged but that the privilege belongs to the corporation not the individual.
What are the benefits of an internal investigation?
• Allows the company to learn the full scope of the problem
• Allows the company to remedy internal problems and help prevent future problems
• May allow the company to recover assets that were lost as a result of the misconduct
• May allow the company to avoid a lengthy governmental investigation
• May allow the company to take advantage of potential benefits of cooperation with government investigations
• May mitigate penalties that result from civil and criminal investigations
• May insulate the company, Board of directors, or management against allegations of complicity or of willful blindness to red flags
• Allows the company to manage reputational risk
• Helps the company prepare for civil & criminal litigation
• Promotes a culture of transparency and compliance
Once an organization has identified any relevant weaknesses it is important to develop an ongoing compliance plan. Compliance plans ensure that organizations are in compliance with necessary rules, regulations, policies, laws, and standards. 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
• Create a clear corrective action plan for if the compliance program is breached.
A compliance plan will help ensure that an organization is in compliance with all relevant laws, rules and regulations and following best practices. A robust and well monitored compliance plan can help a corporation effectively deal with wide ranging investigations and prosecutions, help a corporation save money and protect the company’s brand from scandal and lawsuits.
Experience the Peters Brovner Difference
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, Mark Peters and Lesley Brovner served as Commissioner and First Deputy 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 free consultation.