Presenting a live 90-minute webinar with interactive Q&A Government Investigations of Corporate Misconduct: Privilege, Self-Reporting, Yates Memo and Other Key Issues Strategies to Shield the Business and its Counsel from Liability, Prosecution and Reputational Damage TUESDAY, FEBRUARY 9, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Shireen M. Becker , Partner, Jones Day , San Diego Steven A. Fredley, Partner, Harris Wiltshire & Grannis , Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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G OVERNMENT I NVESTIGATIONS OF C ORPORATE M ISCONDUCT : 5 P RIVILEGE , S ELF -R EPORTING , Y ATES M EMO AND O THER K EY I SSUES Presented By: Shireen M. Becker, Partner, Jones Day Steven A. Fredley, Partner, Harris, Wiltshire & Grannis
Preparing for Investigation 6
Four Key Questions to Consider Before 7 Beginning Any Internal Investigation 1. Who is best suited to conduct the internal investigation? 2. What is the appropriate scope of the internal investigation? 3. Who should be advised (and kept apprised) of the internal investigation? 4. How should the internal investigation be structured to maintain the attorney-client privilege and work-product protections?
Who Should Conduct The 8 Investigation? • Advantages of In-House Counsel • Know how the company operates • Access key information more quickly • Know employees and more likely to have their trust • Advantages of Outside Counsel • Viewed as more independent • More resources on which to draw
Who Should Conduct The 9 Investigation? • Factors to Consider in Deciding Between In-House or Outside Counsel • Need to protect privilege • United States v. Singhal , 800 F . Supp. 2d 1 (D.D.C. 2011) (“Where business and legal advice are intertwined, the legal advice must predominate for the communication to be protected.”) • Akzo Nobel Chemical Ltd. v. Commission , Case-550/07 (European Ct. Justice) (holding that internal company communications with in-house lawyers are not privileged; privilege applied only to “independent” lawyers who are not bound to the client by a relationship of employment”) • Experience and resources of in-house counsel & legal department
Who Should Conduct The 10 Investigation? • Factors to Consider in Deciding Between In-House or Outside Counsel • Nature of the problem • Outside Counsel better suited to investigate: • Conduct involving issues related to the company’s accounting or financial reporting • Conduct of senior management • Conduct raising issues concerning the company’s internal controls • In-House Counsel better suited to investigate: Violations of employment laws • Internal employment policies •
Who Should Conduct The 11 Investigation? • Factors to Consider in Using Regular or New Outside Counsel • Extent to which regular outside counsel’s advice may be at issue • See, e.g. , In re Enron Corp. Sec., Derivative & ERISA Litig. , 235 F . Supp. 2d 549 (S.D. Tex. 2002) (noting “issue of a serious conflict of interest” arises when the firm alleged to have participated in the wrongdoing investigates the same wrongdoing). • Perception by government regulators and prosecutors of independence • Whether regular outside counsel has a prior or current attorney- client relationship with employees who may be targets of investigation • See, e.g. , United States v. Nicholas , 606 F . Supp. 2d 1109 (C.D. Cal. 2009)
Who Should Conduct The 12 Investigation? • Role of In-House Counsel • Facilitate work of outside counsel • Employee Interviews • Document retention and collection • Avoid appearance of influence over the investigation or results • Role of lawyers in internal investigations is a “particular focus” because in some instances lawyers “may have conducted investigations in such a manner as to help hide ongoing fraud, or may have taken actions to actively obstruct such investigations.” (Stephen Cutler, SEC Director Division of Enforcement)
What is the Appropriate Scope of 13 the Internal Investigation? • Create a written work plan that contains the following: • Key issues to be investigated • Relevant time period • Categories of documents to be gathered • Method by which such documents will be collected, translated (if necessary), and reviewed • Identity and order of witness interviews • External consultants • Timeline
What is the Appropriate Scope of 14 the Internal Investigation? • Benefits of Written Work Plan – Front End • Investigation reasonably tailored to the issues presented • Set expectations for time and cost • Identify potentially sensitive areas in the investigation • Benefits of Written Work Plan – Back End • Can help prevent the dreaded “runaway” investigation • Can serve as the measuring stick for a variety of future audiences who may have an interest in assessing the adequacy of the investigation conducted
What is the Appropriate Scope of 15 the Internal Investigation? • Does the allegation have broader implications than the immediate matter? • Inadequate process controls? • Inadequate policy guidance? • Is there a larger problem that needs to be investigated? • E.g., allegation of improper booking of gross revenue on a services translation involving third party contracts – do you investigate similar contracts? • E.g., allegation of corruption in China with same sales force handling Vietnam – do you investigate Vietnam?
What is the Appropriate Scope of 16 the Internal Investigation? • Don’t “Boil the Ocean” • Leslie R. Caldwell, Assistant Attorney General • But don’t ignore signposts and signals that a discrete allegation may suggest risk in broader business practices • Document the decision for future reference
Who should be advised (and kept apprised) of the internal 17 investigation? Private Civil Foreign Media Litigants Governmen Public ts Governmen t Vendors Enforceme nt Agencies Executive Customers Team COMPANY Board Lenders Insurers Employees Shareholde Auditors rs
Who should be advised (and kept apprised) of the internal 18 investigation? • Information about the investigation — even the fact of the investigation itself — should be strictly controlled and generally considered to be highly confidential • Potential Stakeholders • The Board and Company Management • Outside Auditors • Local Country Management • D&O Insurers
How to Best Protect the Attorney- 19 Client Privilege and Work-Product? 1. Document that the investigation is undertaken for purpose of providing legal advice. 2. Emphasize importance of confidentiality. 3. Outside consultants should be retained by counsel. 4. Give Upjohn warnings at the outset of all witness interviews. 5. Mark all investigation- related documents as “Attorney - Client Privileged” or “Attorney Work Product” (or both) as appropriate. 6. Be aware that attorney-client privilege can vary from country to country.
Conducting Investigation 20
Document Retention Strategies 21 “The scope of a party’s preservation obligation can be described as follows: Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.” - Zubulake v. UBS Warburg LLC, 220 F .R.D. 212 (S.D.N.Y. 2003) • Key Questions Regarding Duty to Preserve: • When does the duty attach? • What information is subject to that duty?
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