Los Angeles Investigations Attorneys
Conducting an internal investigation of a company or organization is often a key step in responding to a government investigation (or even the threat of such an investigation) or in response to public, shareholder, or management scrutiny over the perception of perceived wrongdoing. A well-executed internal investigation can help a company or an organization better understand the presence of wrongful action (or lack thereof), and move forward in either taking corrective action and/or helping to avoid further negative consequences in the form of a government enforcement action and/or loss of public and shareholder trust.
The attorneys of Zweiback, Fiset & Zalduendo have the experience necessary to conduct internal investigations on behalf of companies and other institutions of all sizes and across industries that help those institutions reach positive outcomes while mitigating risk.
What Are Internal Investigations?
Internal investigations conducted by a third-party law firm can take a number of forms in a number of contexts. In the context of white collar defense, an internal investigation might be undertaken for the purposes of sharing certain findings of the internal investigation with the government in pursuit of demonstrating to the government that any potential wrongful actions have been identified and contained, and that appropriate remedial action (i.e., the termination of noncompliant employees and the implementation of procedural safeguards to prevent future violations) have been taken to avoid future issues.
Alternatively, the purpose of an internal investigation may be solely for gathering internal knowledge on behalf of management, a board of directors, and/or shareholders to determine whether and what wrongful conduct might be occurring in an institution – whether there is a government investigation underway or not – and then taking appropriate responsive action in light of the investigation’s findings, which may include reporting those findings or not.
In either case, it is imperative for an internal investigation conducted by a third party law firm to be conducted in a thorough and discrete manner by attorneys with the experience and skills necessary to “turn over every stone” while maintaining confidentiality and avoiding unnecessary collateral consequences.
Common Compliance Issues Necessitating an Internal Investigation
There are any number of potential situations within a business or organization which might necessitate an internal investigation by a third party law firm conducted on behalf of management and/or shareholders, including but not limited to the following:
- False Claims Act / Procurement Fraud: Violations of the FCA which often involve healthcare fraud or procurement fraud can lead to steep financial penalties and criminal enforcement actions, thus it is important for an organization to understand if such fraud is occurring by employees and/or shareholders and respond accordingly.
- Securities Fraud: Potential insider trading and other violations of state and federal securities laws can occur within financial institutions in manners that are not abundantly clear to management, and it is thus critical to take proactive steps to monitor, correct, and report such actions if necessary.
- Foreign Corrupt Practices Act and Public Corruption: Many companies face significant legal liability when employees engage in bribery/corruption practices on local, state, federal and international levels (including FCPA violations for bribery of government officials in other countries), and a robust internal investigation is commonly necessitated to identify and appropriately handle such issues.
- Sexual Misconduct: While the individual perpetrators of sexual misconduct certainly face the prospect of legal liability, how companies and organizations act to prevent and/or respond to such misconduct involves significant legal liability as well, and it is often necessary for an internal investigation to be part of such a response.
The Internal Investigations Process and What You Should Expect
A proper internal investigation should be well-planned and well-executed to ensure confidentiality and the minimization of collateral damage while maximizing the ability of the company or organization to obtain necessary information and data. Common steps in an internal investigation include:
- Selecting a third-party internal investigator: Third party law firms are often chosen as internal investigators for their experience, reputation, and, critically, their ability to provide confidentiality to the organization via attorney-client privilege. For this reason, prior to bringing in a third party law firm, it is important for internal/general counsel to be present and actively engaged in any preliminary investigative efforts. Often, a General Counsel’s office, the Human Resources department in some cases, and/or a Board of Directors or company management will be involved in initial assessment of a situation and a determination of whether to bring in a third party law firm and the selection of said firm.
- Preparing an internal investigation strategy: The third party firm will work with the relevant contacts inside the organization (general counsel, human resources, etc.) to understand what information has come to the surface thus far regarding wrongdoing, and what the proper scope of the investigation should be, as well as what investigative steps need to be taken, as discussed below.
- Interviewing relevant individuals: An internal investigation will generally involve interviews of relevant individuals within the organization who may have knowledge of specific actions and processes more generally. Typically, interview outlines will be assembled specific to each individual, and the investigators will conduct the confidential interviews and take notes to be used in assembling findings. Such interviews may or may not involve documents as discussed below.
- Collecting and examining documents: It may be necessary to collect documents from relevant individuals and departments in conducting interviews and in the accumulation of information generally for the purposes of the investigation. This can range from the request of relevant documents to a more intensive forensic collection and examination of electronic data.
- Compiling findings: Interviews and collections of documents (as well as any other investigative steps such as visits to specific locations, consultations with outside experts, etc.) will be used in compiling the findings of the investigation. Typically, this is a rolling process that may involve preliminary findings which are then used to further guide the investigation.
- Determining next steps: At the culmination of the investigation – or at any point during the investigation depending upon the context of the situation and the findings that are made – there will be a decision-making process on what the next steps are with respect to the findings, which may involve a number of options such as public disclosure, reporting to a government agency, a determination of corrective action, or a determination that no further steps are needed.
Contact a Seasoned Internal Investigations Attorney
It is an old but accurate adage that how an organization responds to wrongdoing can be just as important if not more important than the underlying wrongdoing itself. Furthermore, it is often beneficial to an organization to respond to potential wrongdoing within its ranks with what might be considered an overabundance of caution in order to demonstrate that it takes oversight seriously and to prevent future wrongdoing. To schedule a consultation with a seasoned internal investigations attorney, contact our office today.