The FCPA Report

The definitive source of actionable intelligence covering the Foreign Corrupt Practices Act

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By Topic: Internal Investigations

  • From Vol. 6 No.4 (Mar. 1, 2017)

    Protecting Attorney-Client Privilege and Attorney Work Product While Cooperating With the Government: Implications for Collateral Litigation (Part Three of Three)

    When a company conducts an internal investigation and cooperates with the government, collateral litigation can follow. To support their discovery efforts, litigants may try to argue, among other things, that the privilege and work product protection were waived as a result of the company’s cooperation with the government. This third and final installment in the three-part guest article series by Eric J. Gorman, a partner at Skadden Arps, and his associate, Brooke A. Winterhalter, analyzes strategies and legal arguments that companies may wish to consider as they seek to shield investigation materials shared with the government from third-party discovery requests in collateral litigation. For the first two installments in the series see “Establishing Privilege and Work Product in an Investigation” (Feb. 1, 2017) and “Cooperation Benefits and Risks” (Feb. 15, 2017).

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  • From Vol. 5 No.25 (Dec. 21, 2016)

    Government and Defense Bar Perspectives on the New Weapons in the FCPA Arsenal

    The SEC and DOJ have new weapons in their arsenal to fight corruption. Increased personnel, coordinated global investigations and new forms of settlement are changing the face of FCPA enforcement, officials said during ACI’s 33rd International Conference on the FCPA in Washington, D.C. The FCPA Report talked to defense lawyers to gauge their reaction to the government’s statements, and how the government’s enforcement approach affects the advice they give companies. See our coverage of last year’s ACI panel, “Top FCPA Enforcers Discuss Evolving and Diverging Enforcement Approaches and the Defense Bar Responds” (Dec. 2, 2015).

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  • From Vol. 5 No.25 (Dec. 21, 2016)

    Navigating Data Privacy Laws in Cross-Border Investigations

    Conducting a cross-border investigation or performing global due diligence each has its own set of unique challenges, which only become more formidable when coupled with a formal anti-corruption inquiry. In the E.U. in particular, issues range from confusing and often conflicting privacy laws, to language and cultural barriers, to custodian access and local coordination. In a guest article, Deena Coffman and Nina Gross, managing directors at BDO, provide insight on the data privacy landscape in the E.U. and how to comply with competing demands during a cross-border investigation. See “Conflicting Compliance Obligations: How to Navigate Data Privacy Laws While Performing Internal Investigations and Promoting FCPA Compliance in the E.U. (Part One of Three)” (Jan. 9, 2013); Part Two (Jan. 23, 2013); Part Three (Feb. 6, 2013).

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  • From Vol. 5 No.22 (Nov. 9, 2016)

    Employee Discipline and Internal Investigations After the Yates Memo

    Over the past year, the Department of Justice has reiterated and re-emphasized its focus on holding individuals accountable for corporate wrongdoing. For companies investigating potential FCPA violations, these mandates raise the stakes on the already complex issue of employee discipline. In a guest article, Paul Hastings partner Palmina M. Fava and her associate Mor Wetzler explain how companies must balance the need to promptly remediate and discipline wrongdoing with not depriving the company of access to employees before obtaining all of the facts needed to fully understand the issues. See “How Will the Yates Memo Change DOJ Enforcement? (Part One of Two)” (Sep. 23, 2015); Part Two (Oct. 7, 2015).

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  • From Vol. 5 No.19 (Sep. 28, 2016)

    Managing Data Privacy Challenges in Performing Due Diligence and Internal Investigations in China (Part Two of Two)

    For companies doing business in China, understanding data privacy and cybersecurity requirements under Chinese law is critical. But once a company is familiar with the basic legal contours, more practical concerns move to the forefront. In this article, the second in a two-part series on China’s data privacy and cybersecurity laws, we share insights from practitioners working in China on how companies can manage the practical challenges of running their businesses while staying on the right side of the law. The first article in the series explained the basic structure of the data compliance regime in China, including the criminal law, civil law, industry regulations and the draft Cybersecurity Law. See also “The Emperor Is Far Away: The Evolving Nature of Third-Party Risk in China” (Sep. 9, 2015).

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  • From Vol. 5 No.18 (Sep. 14, 2016)

    There’s a Problem, Now What? Philip Urofsky of Shearman Explains the Logistics of Self-Reporting

    Making the decision to self-report can be agonizing, as can a government investigation. But what happens in the interim? Once a company has identified an anti-corruption issue, conducted a preliminary investigation and determined that alerting the authorities may be prudent, how should it go about actually self-reporting? In a recent conversation, Philip Urofsky, a partner at Shearman & Sterling, walked us through the steps of self-reporting and discussed several ways companies can make the process as painless as possible. See “How Will the Fraud Section’s Pilot Program Change Voluntary Self-Reporting?” (Part Two of Three) (May 4, 2016).

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  • From Vol. 5 No.15 (Jul. 27, 2016)

    Regional Risk Spotlight: What Companies Need to Know About Internal Investigations in South Africa

    Japanese conglomerate Hitachi recently paid a $19 million penalty for corruption related to its work with a local partner in South Africa. That case highlighted the FCPA risks associated with South Africa’s local content requirements, but the country also has rigorous anti-corruption, anti-terrorism and data privacy laws that can further influence a company’s assessment of corruption risk and how it performs internal investigations. The FCPA Report recently spoke with Vlad Movshovich and Meluleki Nzimande of South African law firm Webber Wentzel to learn more about South Africa’s current enforcement environment and what companies need to know in order to manage their anti-corruption risk. See “Lack of Training and Due Diligence Leads to $19 Million Penalty for Hitachi” (Oct. 7, 2015).

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  • From Vol. 5 No.14 (Jul. 13, 2016)

    Six Things About State Secrets to Consider When Engaging in Internal Investigations in China (Part Two of Two)

    China’s state secrets law is the source of much angst for lawyers. While the concept of protecting state secrets is straightforward – and common to most countries – the breadth and ambiguity of China’s law, and the inconsistent way it is enforced, create unique compliance challenges for companies operating in the PRC, particularly those faced with an internal investigation of a possible anti-corruption violation. In the first part of this two-part series on China’s state secrets law, we discussed the relevant legal framework and how state secrets are defined. In this second article, we discuss six concerns a company needs to address when formulating a sensible investigation strategy based on insights from lawyers on the ground in China. See “Fighting the Dynamic War on Corruption in China” (Oct. 21, 2015).

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  • From Vol. 5 No.14 (Jul. 13, 2016)

    Former FBI Agents’ Views on Building and Managing an Investigatory Team

    As the government focus on self-reporting continues to increase, a company’s ability to conduct effective internal investigations becomes even more critical. A compliance officer faced with a corruption issue must act quickly to determine whether further internal or external investigation is neccesary. In an interview with The FCPA Report, former FBI agents Scott Moritz and Bob Hennigan, now at Protiviti, discuss how a company can effectively manage a corruption investigation, from building an investigatory team to closing out the inquiry. For more articles in this series, see “Former Prosecutor Nathaniel Edmonds Shares His Internal Anti-Corruption Investigation Strategies” (May 13, 2015) and “An Accountant’s View on How to Effectively Use Forensic Investigators During an Internal Investigation” (Jan. 27, 2016).

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  • From Vol. 5 No.14 (Jul. 13, 2016)

    The Pilot Program in Practice: A Comparison of Pre- and Post-Program Resolutions

    The Department of Justice recently signaled major developments in its anti-bribery enforcement initiatives with the release of its Foreign Corrupt Practices Act Enforcement Plan and Guidance and the announcement of its yearlong pilot program. But, will the DOJ’s new and improved enforcement protocol result in benefits to companies who choose to self-report, cooperate and remediate? In a guest article, Ropes & Gray’s Ryan Rohlfsen, Timothy Farrell and Dante Roldan examine – and provide detailed charts illustrating – the differing outcomes of DOJ cases before and after the recent policy announcements. See also “Going Deep on the Fraud Section’s FCPA Pilot Program” (Apr. 20, 2016); “How Will the Fraud Section’s Pilot Program Change Voluntary Self-Reporting?” (May 4, 2016); and “Earning Cooperation Credit Under the Fraud Section’s FCPA Pilot Program” (May 18, 2016).

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  • From Vol. 5 No.14 (Jul. 13, 2016)

    Second Circuit Rules Employees May Be Fired for Refusing Internal Investigation Interview

    After the Yates Memo, which requires that a company under investigation disclose all information about individual wrongdoing to receive cooperation credit, individuals may be more likely to push back when asked to participate in internal investigations. What recourse do employers have if employees refuse to cooperate? A recent Second Circuit ruling “establishes a corporation’s right to ‘assume the worst’ and fire an employee who declines to sit for an interview, if and when the corporation has a reasonable basis to suspect the employee engaged in criminal conduct,” Juan Morillo, a partner at Quinn Emanuel, told The FCPA Report. We analyze the decision, Gilman v. Marsh & McLennan Co., Inc., and the questions it raises. See also “Internal Investigations and Criminal Discovery After the Yates Memo” (Apr. 6, 2016).

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  • From Vol. 5 No.13 (Jun. 29, 2016)

    A Primer on China’s State Secrets Law for Anti-Corruption Practitioners (Part One of Two)

    The high incidence of FCPA settlements involving allegations of corruption in China hints at a much wider number of companies facing possible anti-corruption issues that need investigation in the PRC. But China’s laws on reviewing and transmitting certain types of data present unique complications for companies performing internal investigations. In particular, China’s state secrets law is one of the greatest sources of complexity for foreign companies and their counselors. Vaguely worded and inconsistently enforced, the law forbids the transport of certain documents outside of the PRC. The FCPA Report recently spoke with a number of attorneys working in Asia to demystify this area of law and get tips on how to practically conduct an internal investigation while minimizing risk. In this, the first part in a two-part series, we explain the framework of the state secrets law and what types of information and data it may cover. In the second part we will discuss practical implications of the law for companies engaged in cross-border investigations. See “The Emperor Is Far Away: The Evolving Nature of Third-Party Risk in China” (Sep. 9, 2015).

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  • From Vol. 5 No.13 (Jun. 29, 2016)

    Experts at Quinn Emanuel and EY Discuss Employee Reluctance to Participate in Internal Investigations and When to Call In Outside Counsel

    When a possible anti-corruption issue comes to a company’s attention, determining what happened and who was involved is of the utmost importance, but recent DOJ directives may be changing how companies go about getting that information. The Yates Memo and the FCPA Unit Pilot Program, which lay out what companies need to do to receive full credit for cooperating with a government investigation, put a premium on providing information about culpable individuals. Recently, The FCPA Report and Quinn Emanuel hosted a panel to discuss how these policy statements are changing the way companies – and their employees – approach internal investigations. The panel, moderated by Nicole Di Schino, Editor-in-Chief of The FCPA Report, included Quinn partners Juan Morillo, Jenny Durkan and Ben O’Neil along with Steve Spiegelhalter, a principal in the fraud investigations and dispute services practice at EY. “The real combined effect of the Yates Memo and the pilot program has, in many ways, an unintended consequence,” Morillo said. “It is going to make individuals more hesitant to cooperate with internal investigations.” See “Internal Investigations and Criminal Discovery After the Yates Memo,” (Apr. 6, 2016) and The FCPA Report’s three part series on the FCPA Unit’s Pilot Program: “Going Deep on the Fraud Section’s FCPA Pilot Program” (Apr. 20, 2016); “How Will the Fraud Section’s Pilot Program Change Voluntary Self-Reporting?” (May 4, 2016); and “Earning Cooperation Credit Under the Fraud Section’s FCPA Pilot Program” (May 18, 2016).

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  • From Vol. 5 No.13 (Jun. 29, 2016)

    Foreign Attorneys Share Insight on Data Privacy and Privilege in Multinational Investigations

    Multi-jurisdictional anti-corruption investigations are proliferating and subject companies must manage competing requests and competing legal regimes. At the recent White Collar Crime Institute presented by the New York City Bar Association, a panel of foreign lawyers delved into the challenges faced by counsel confronting multinational regulatory actions, including coordinating requests from multiple jurisdictions, preserving attorney-client privilege, conducting witness interviews and navigating data privacy laws. The panel featured attorneys based in London, Geneva, Hong Kong and Sao Paulo. See “How the Expanding Petrobras Scandal May Spark a New Era of Multi-Lateral Enforcement” (Dec. 2, 2015).

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  • From Vol. 5 No.10 (May 18, 2016)

    Earning Cooperation Credit Under the Fraud Section’s FCPA Pilot Program (Part Three of Three)

    The main purpose of the Fraud Section’s FCPA pilot program appears to be to encourage companies to step forward and self-report when they learn of a possible violation. Companies that do so will be rewarded – but only if they cooperate with the DOJ fully. Encouraging companies to cooperate in investigations has been an underlying theme of the government’s messaging for years, but exactly what constitutes such full cooperation has never been laid out as clearly as it is in the FCPA Unit Guidance. However, several questions remain for companies considering cooperation. This final article in The FCPA Report’s series taking a deep look at the new pilot program addresses these areas of ambiguity and how they might influence a company’s willingness to cooperate. See previously “Going Deep on the Fraud Section’s FCPA Pilot Program (Part One of Three)” (Apr. 20, 2016); “How Will the Fraud Section’s Pilot Program Change Voluntary Self-Reporting? (Part Two of Three)” (May 4, 2016).

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  • From Vol. 5 No.9 (May 4, 2016)

    Employee Interviews in Internal Investigations After Yates: A Conversation With Quinn Emanuel and EY

    Although the long-term impact of the recent policy developments coming out of the DOJ is not certain, one thing appears to be – the Yates Memo will change the tenor of employee interviews conducted during internal investigations. In the past, employees might have been eager to participate to save their jobs, but now many more may be reluctant to cooperate with investigators at all, or may put conditions on their participation. The FCPA Report spoke with Quinn Emanuel partners William Burck and Ben O’Neill, as well as Stephen Spiegelhalter, a principal in the fraud investigations and dispute services practice at EY, about the new reality of interviewing employees during investigations. On May 16, 2016, Burck, O’Neill and Spiegelhalter will participate in a symposium hosted by Quinn Emanuel and The FCPA Report on this and other issues related to conducting internal investigations and negotiating with the government in light of the Yates Memo and the new DOJ Pilot Program. For more information on the symposium and to register, please contact Max Humphrey at mhumphrey@fcpareport.com.

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  • From Vol. 5 No.8 (Apr. 20, 2016)

    The FCPA Report and Quinn Emanuel to Host Panel on Post-Yates Memo Investigations

    More than six months have passed since the DOJ issued the September 2015 Memorandum from Deputy Attorney General Sally Yates regarding Individual Accountability for Corporate Wrongdoing. While the full effects of the Yates Memo are still being debated, its impact on how companies investigate and resolve possible corruption issues is already palpable. On May 16, Quinn Emanuel and The FCPA Report will host a panel in New York addressing the challenges of navigating internal investigations and negotiations with the government in the post-Yates Memo era. Panelists will include Quinn Emanuel partner William Burck and Steve Spiegelhalter, a principal in the fraud investigations and dispute services practice at EY. For more information on the symposium please contact Max Humphrey at mhumphrey@fcpareport.com.

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  • From Vol. 5 No.4 (Feb. 24, 2016)

    Deal Struck to Keep Transatlantic Data Flowing

    Two days after the expiration of a deadline set by Europe’s data protection authorities, and after months of negotiations, the European Commission and U.S. Department of Commerce reached an understanding that intends to allow transatlantic transfer of digital data by thousands of companies to continue, including the data flowing in cross-border anti-corruption investigations. The so-called “Privacy Shield” agreement “makes existing cooperation between the FTC and E.U. DPAs [data protection authorities] more robust, with better enforcement mechanisms and means of redress for E.U. citizens whose privacy rights may have been infringed by E.U.-U.S. cross-border transfers,” Davina Garrod, a London-based Akin Gump partner, said. However, she added that “the shield is by no means a panacea, and does not fix all of the problems identified by the [E.U. Court of Justice] in the Schrems judgment” that invalidated the previous Safe Harbor data transfer pact. We discuss the agreement, important steps that remain before the Privacy Shield can be finalized, and the immediate impact on cross-border investigations and other data exchanges with the E.U. See “Conflicting Compliance Obligations: How to Navigate Data Privacy Laws While Performing Internal Investigations and Promoting FCPA Compliance in the E.U. (Part One of Three)” (Jan. 9, 2013); Part Two (Jan. 23, 2013); Part Three (Feb. 6, 2013).

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  • From Vol. 5 No.2 (Jan. 27, 2016)

    An Accountant’s View on How to Effectively Use Forensic Investigators During an Internal Investigation

    The costs of a large internal corruption investigation can, and often do, overshadow even significant fines levied by regulators. When faced with an internal investigation that requires outside forensic investigators, a company’s ability to create effective relationships with those consultants can significantly influence the final cost of the investigation. In an interview with The FCPA Report, Sara Putnam of PwC shares an accountant’s view of an FCPA investigation. Putnam describes the tools a company can provide investigators to make the investigation more effective, discusses how an investigation team can be designed, addresses data privacy issues and more. For a former prosecutor’s take on internal investigations, see “Former Prosecutor Nathaniel Edmonds Shares His Internal Anti-Corruption Investigation Strategies” (May 13, 2015).

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  • From Vol. 5 No.1 (Jan. 13, 2016)

    Former Prosecutor Nat Edmonds Discusses the Implications of the Recent Changes to the U.S. Attorneys’ Manual (Part One of Two)

    In November 2015, Deputy Attorney General Sally Quillian Yates announced that the section of the U.S. Attorneys’ Manual (USAM) codifying the principles governing the prosecution of business organizations had been updated to reflect the DOJ’s efforts to hold more individuals accountable for corporate criminal activity. Yates said the changes, which are publicly available, will give companies insight into how the government’s policy will be applied during the “everyday work” of federal prosecutors. Former prosecutor Nat Edmonds, now a partner at Paul Hastings, told The FCPA Report that the changes don’t indicate an actual “policy shift,” but rather a “formalization” of DOJ best practices. Yet, he emphasized, the subtle shifts in the USAM language may require a change in strategy when a company is faced with an FCPA investigation. We share his insight in a two-part series. See also “How Will the Yates Memo Change DOJ Enforcement? (Part One of Two)” (Sep. 23, 2015); Part Two (Oct. 7, 2015).

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  • From Vol. 5 No.1 (Jan. 13, 2016)

    Creating Value in FCPA Investigations Through Increasing Cooperation Credit

    When payments to a third party with possible connections to the government are discovered in a high-risk market, what is a general counsel to do? This guest article, featuring a hypothetical narrative, tracks the trials and tribulations of a general counsel confronted with such an FCPA matter. Baker Donelson partner Joe Whitley and associate David Stewart provide specific advice about how a GC can successfully navigate an internal corruption investigation from the initial fact discovery to negotiating for sufficient resources to addressing collateral consequences. See Brockmeyer and Stokes Offer Four Benefits of Cooperation and Four Ways Companies Can Go Wrong in Their Internal Investigations” (Dec. 16, 2015).

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  • From Vol. 4 No.21 (Oct. 21, 2015)

    A Dangerous Harbor?  Analyzing the European Court of Justice Ruling

    An Austrian graduate student’s lawsuit against Facebook has resulted in the invalidation of a 15-year old data privacy treaty relied upon by thousands of multi-national companies.  On October 6, 2015, the Court of Justice of the European Union (ECJ), the highest court in the E.U., held that the Safe Harbor framework that allowed companies to transfer personal data from the E.U. to the U.S., including data for cross-border investigations and discovery, is invalid.  The ECJ found that the U.S. does not ensure adequate protection for personal data, primarily because of the access rights that the ECJ said U.S. agencies have.  Although the ruling is immediate, the “sky is not falling,” said Harriet Pearson, a partner at Hogan Lovells.  On October 16, 2015, a group of E.U. member state privacy regulators, the Article 29 Working Party, called for renewed negotiations on a treaty and recommended interim actions for companies.  There will need to be a “transition to a more complex and perhaps a more work-intensive compliance strategy than Safe Harbor had previously afforded companies,” Pearson said.  See “Checklist of Actions to Take and Issues to Consider When Navigating Data Privacy and Anti-Corruption Issues,” The FCPA Report, Vol. 2, No. 21 (Oct. 23, 2013).

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  • From Vol. 4 No.20 (Oct. 7, 2015)

    How Will the Yates Memo Change DOJ Enforcement? (Part Two of Two)

    Last month, Deputy Attorney General Sally Quillian Yates issued a memo to all United States Attorneys outlining “six key steps” designed to strengthen the DOJ’s “pursuit of individual corporate wrongdoing.”  The FCPA Report spoke to three former DOJ attorneys about how the Yates Memo may affect companies and their compliance programs.  The first article in this two-part series assessed how much of a policy shift the Yates Memo truly represents and how it may affect a target’s decision to cooperate with the government.  This second article focuses on two other major issues raised by the Memo: (1) the directive to gather information about individual culpability earlier and (2) a possible increase in the number of civil actions brought against individuals.  It also discusses whether companies should reconsider their internal investigation procedures. See also “FCPA Enforcement Officials and Defense Bar Debate FCPA Policy,” The FCPA Report, Vol. 4, No. 12 (Jun. 10, 2015).

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  • From Vol. 4 No.19 (Sep. 23, 2015)

    How Will the Yates Memo Change DOJ Enforcement? (Part One of Two)

    Under pressure to hold individuals accountable, the DOJ says it will be intensifying its focus on individuals by taking six key steps during investigations.  Deputy Attorney General Sally Quillian Yates issued a memo to all U.S. Attorneys outlining the steps she says will strengthen the DOJ’s pursuit of corporate wrongdoing.  Former DOJ attorneys talked to The FCPA Report about the implications of what the DOJ is characterizing as a policy shift.  The first article in this two-part series discusses the extent to which the memo may change the enforcement climate and the cooperation calculus for companies and individuals.  The second part addresses how focusing on individuals earlier in the investigations and the increased coordination of efforts between the DOJ’s civil and criminal divisions may affect internal investigations.  See “Top DOJ and SEC Officials Discuss FCPA Enforcement Priorities and Mechanics,” The FCPA Report, Vol. 3, No. 7 (Apr. 2, 2014).

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  • From Vol. 4 No.15 (Jul. 22, 2015)

    Addressing E-Discovery Challenges When Conducting International Investigations

    Conducting e-discovery in a cross-border investigation – a task difficult to avoid in an FCPA probe – presents an array of challenges including compliance with data privacy and other local laws; language and cultural barriers; and data collection issues.  In a guest article, e-discovery experts at Epiq Systems Martin Bonney and Melinda Kunjasich detail those challenges and explain best practices for conducting thorough and cost efficient e-discovery in international investigations.  See also “How to Manage a Multi-National Anti-Corruption Investigation,” The FCPA Report, Vol. 2, No. 6 (Mar. 20, 2013).

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  • From Vol. 4 No.10 (May 13, 2015)

    Former Prosecutor Nathaniel Edmonds Shares His Internal Anti-Corruption Investigation Strategies

    At the first sign of a red flag that points to possible bribery, a multi-national company must consider whether to initiate an internal investigation, which can deter any nefarious activity, demonstrate an independent commitment to good compliance, and if the wrongdoing has already occurred, prevent or mitigate any potential charges.  However, if not conducted properly, internal investigations can present their own risks, including inadvertent disclosure of the investigation, waiver of the attorney-client privilege, and accusations of improper handling or even obstruction of justice.  To mitigate these risks, a company should adopt a carefully-conceived plan for conducting internal investigations.  In an interview with The FCPA Report, Nathaniel Edmonds, a partner at Paul Hastings and a former FCPA prosecutor, discusses best practices for preparing for, conducting and concluding an investigation, including the appropriate way to handle data, and reveals the biggest mistakes he has witnessed companies make during the investigative process.  See also “How to Handle a Government Investigation: Insight from PwC, Covington, Booz Allen and FINRA,” The FCPA Report, Vol. 3, No. 21 (Oct. 22, 2014). 

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  • From Vol. 4 No.10 (May 13, 2015)

    Private and Public Sector Perspectives on Producing Data to the Government

    Document requests from the government can be overwhelming, even for large companies.  Proactively communicating with the government early in the process can limit the burden placed on a company.  During a panel at Practising Law Institute’s 2015 Government Investigations event, officials from the DOJ, CFTC and SEC, along with private practitioners, shared their insight on the first steps companies should take after receiving a subpoena or other request, how to effectively negotiate with the government about the scope of the request, whether and how the government takes the burden of document productions on companies into account, and more.  See also “Conflicting Compliance Obligations: How to Navigate Data Privacy Laws While Performing Internal Investigations and Promoting FCPA Compliance in the E.U. (Part One of Three),” The FCPA Report, Vol. 2, No. 1 (Jan. 9, 2013); Part Two of Three, Vol. 2, No. 2 (Jan. 23, 2013); Part Three of Three, Vol. 2, No. 3 (Feb. 6, 2013).

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  • From Vol. 4 No.7 (Apr. 1, 2015)

    Experts Discuss the Crucial First 48 Hours of an Internal Investigation and Beyond

    When a company uncovers an anti-corruption problem, it must be ready to react quickly.  “The first 48 hours of any investigation are often critical to the success of that investigation,” Andrew Foose, Vice President of Advisory Services at NAVEX Global, said during a panel at the recent Global Ethics Summit, hosted by Ethisphere Institute and Thomson Reuters.  Foose and the other panelists, William Jacobson, a partner at Orrick, Herrington & Sutcliffe; Adam Briggs, Regulatory Compliance & Ethics Attorney for United Parcel Service; and Benjamin Gruenstein, a partner at Cravath, Swaine & Moore, detailed strategies for those crucial first days and also discussed long-term best practices for conducting effective investigations.  See also “How to Conduct an Anti-Corruption Investigation: Ten Factors to Consider at the Outset (Part One of Two),” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013); “Developing and Implementing the Investigation Plan (Part Two of Two),” Vol. 3, No. 1 (Jan. 8, 2014).

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  • From Vol. 3 No.21 (Oct. 22, 2014)

    How to Handle a Government Investigation: Insight from PwC, Covington, Booz Allen and FINRA

    All companies should be prepared for the eventuality that the government is going to call or a serious whistleblower allegation is going to come in, Kristin Rivera, a partner at PricewaterhouseCoopers said while chairing a panel on government investigations at the 2014 Women, Influence and Power in the Law Conference.  Rivera and the other panelists, Mythili Raman, a partner at Covington & Burling and former Acting Assistant Attorney General for the DOJ’s Criminal Division, Brenda Morris, Deputy General Counsel at Booz Allen Hamilton, and Jessica Hopper, Vice President, Regional Enforcement at FINRA, provided specific strategies for making sure a company is ready for an investigation, and handling every stage of a government investigation thereafter.  See also “How to Conduct an Anti-Corruption Investigation: Ten Factors to Consider at the Outset (Part One of Two),” The FCPA Report, Vol. 2. No. 25 (Dec. 18, 2013); “Developing and Implementing the Investigation Plan (Part Two of Two),” Vol. 3, No. 1 (Jan. 8, 2014).

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  • From Vol. 3 No.18 (Sep. 10, 2014)

    Compliance Experts from Altria, Noble Energy and HP Share Corruption Investigation Best Practices

    A recent American Bar Association program brought together compliance executives from several public corporations to discuss how to both satisfy the client and mollify the government during an anti-corruption investigation – no easy task.  The panelists, along with moderator Mara V.J. Senn, a partner at Arnold & Porter, shared insights and experiences on preparedness for internal investigations, the role of outside counsel, the calculus of voluntary disclosures and a number of other common issues faced by companies conducting internal investigations.  For more from Senn on internal investigations, see “How to Conduct an Anti-Corruption Investigation: Ten Factors to Consider at the Outset (Part One of Two),” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013); and “Developing and Implementing the Investigation Plan (Part Two of Two),” The FCPA Report, Vol. 3, No. 1 (Jan. 8, 2014).  

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  • From Vol. 3 No.16 (Aug. 6, 2014)

    D.C. Circuit Confirms Applicability of Attorney-Client Privilege to Internal Investigations

    Barko v. Halliburton, a March 2014 decision by the U.S. District Court for the District of Columbia, sent shock waves through the ranks of corporate counsel: The District Court ruled that an internal investigation was not privileged because it would have been conducted regardless of whether the company was also seeking legal advice.  In an important reaffirmation of the strength and breadth of the attorney-client privilege, the U.S. Court of Appeals for the D.C. Circuit recently vacated the District Court’s decision, ruling that the privilege was available so long as seeking legal advice was a “significant” purpose – even if not the sole purpose – of the internal investigation.  This decision coincides with a Delaware Supreme Court ruling, discussed above in this issue of The FCPA Report.  That court expressly adopted an exception to the attorney-client privilege for a corporate shareholder who shows “good cause” for obtaining the corporation’s privileged materials (in that case, Wal-Mart).  See also The FCPA Report’s series on conducting internal investigations: “Ten Factors to Consider at the Outset (Part One of Two),” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013); and “Developing and Implementing the Investigation Plan (Part Two of Two),” The FCPA Report, Vol. 3, No. 1 (Jan. 8, 2014). 

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  • From Vol. 3 No.11 (May 28, 2014)

    Three Questions to Ask After Detecting a Possible FCPA Violation

    A report of bribery has come in: a whistleblower has made a complaint or an employee has discovered a violation of an internal control, such as fraud on an expense report.  Among the questions that must be answered are: Who should conduct which parts of the investigation? When should the investigation end?  How should the issue be remediated?  FCPA experts from Paul Hastings, Akin Gump and KPMG weigh in.  See also “How to Conduct an Anti-Corruption Investigation: Ten Factors to Consider at the Outset (Part One of Two),” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013); “Developing and Implementing the Investigation Plan (Part Two of Two),” Vol. 3, No. 1 (Jan. 8, 2014).

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  • From Vol. 3 No.9 (Apr. 30, 2014)

    FCPA Experts in the Public and Private Sector Share Seven Lessons from Recent Cases (Part Two of Two)

    At a recent panel discussion sponsored by the Knowledge Group, former senior FCPA prosecutors, a current SEC lawyer and an economist shared advice on various critical aspects of an internal anti-corruption investigation, including factors to consider at the outset, whether to voluntarily disclose the investigation to the government, how to handle reporting to multiple jurisdictions, and calculating the “benefit of the bribe” for penalty purposes.  The first article in this two-part series contained the seven lessons the panelists extracted from recent FCPA settlements and trends; the initial decisions that a company faces when it discovers a potential violation; and the role of whistleblowers in revealing potential violations. See also “Top DOJ and SEC Officials Discuss FCPA Enforcement Priorities and Mechanics,” The FCPA Report, Vol. 3, No. 7 (Apr. 2, 2014).

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  • From Vol. 3 No.8 (Apr. 16, 2014)

    Seven Lessons from FCPA Enforcement Trends from FCPA Experts in the Public and Private Sector (Part One of Two)

    At a recent panel discussion sponsored by the Knowledge Group, former FCPA prosecutors, a current SEC lawyer and an economist shared their insights on what recent FCPA enforcement actions mean for companies, along with advice for initiating and conducting FCPA investigations. This article, the first of a two-part series, contains seven lessons the panelists have extracted from recent FCPA settlements and trends; initial decisions that a company faces when it discovers a potential violation; and the role of whistleblowers in revealing potential violations. The second part of the series will cover the panelists’ insights on initiating internal investigations; voluntary disclosures; multi-jurisdictional concerns; negotiations with regulators; remediation efforts and calculation of fines. See also “Top DOJ and SEC Officials Discuss FCPA Enforcement Priorities and Mechanics,” The FCPA Report, Vol. 3, No. 7 (Apr. 2, 2014).

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  • From Vol. 3 No.7 (Apr. 2, 2014)

    Audit Committee Responsibilities Before, During and After Internal Investigations: Remediating and Disclosing the Investigation to the Government and the Public (Part Four of Four)

    The end of an internal investigation does not mean the end of work on the matter for a company and the audit committee.  When an internal corruption investigation is completed, “the board should have a full briefing as to the findings, along with recommendations as to what next steps the organization should take,” William Olsen, leader of the Global Investigations and Anti-Corruption Services group at Grant Thornton LLP, told The FCPA Report.  The board and the company must make a series of critical and difficult decisions relating to, among other things, voluntary disclosure to the government, remediation measures and public disclosures.  The role the audit committee should play in these issues can be hard to define.  The FCPA Report is publishing a four-part article series on audit committee responsibilities throughout an internal investigation. This final article in the series suggests best practices for an audit committee after the “meat” of the investigation is done, including whether and how to self-report and other crucial post-investigation decisions on remediation and SEC disclosures.  The first article in the series, “Five Steps to Take Before the Investigation Begins,” detailed the committee's responsibilities, the risks and liabilities it faces and steps it should take before the need to investigate arises. The second article, “Determining When and How to Proceed,” discussed vetting complaints for the audit committee, determining when an investigation is needed and who should lead the investigation. The third article, “Retaining Counsel, Gathering Information and Documenting the Investigation,” discussed what the company and audit committee should do when initiating an investigation; when the company should retain outside counsel and other experts; how the company should gather information relevant to the investigation; and whether and how the company should document the investigation.

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  • From Vol. 3 No.7 (Apr. 2, 2014)

    Top DOJ and SEC Officials Discuss FCPA Enforcement Priorities and Mechanics

    At this year’s Momentum Global Anti-Corruption Congress, Charles Cain, Deputy Chief of the SEC’s FCPA Unit and Jeffrey H. Knox, Chief of the Fraud Section of the DOJ, Criminal Division, lifted the veil on the government’s thinking in FCPA investigations.  The discussion, led by David H. Resnicoff, a member at Miller & Chevalier, covered a range of topics on the minds of FCPA practitioners and compliance officers, including the timing of voluntary self-disclosures, the kinds of cases the government may decline to pursue, effective cooperation with FCPA investigations, the role of audit committees in compliance strategies and the programmatic success of the FCPA Guidance released in 2012.  See “When Should a Company Voluntarily Disclose an FCPA Investigation?,” The FCPA Report, Vol. 3, No. 4 (Feb. 19, 2014); and “DOJ and SEC Officials Provide Candid Insight into the Recently Issued FCPA Guidance,” The FCPA Report, Vol. 1, No. 13 (Nov. 28, 2012).

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  • From Vol. 3 No.6 (Mar. 19, 2014)

    Strategies for Conducting Effective Employee Interviews in an Anti-Corruption Investigation

    A critical part of the fact-gathering process in an internal anti-corruption investigation is the interviewing of employees who may have relevant information, but conducting effective interviews – handling evasive witnesses and protecting attorney-client privilege, for example – is difficult.  A recent webinar conducted by Michael Volkov of The Volkov Law Group LLC provided valuable strategies for maximizing the value of employee interviews.  Volkov discussed, among other things, how to best prepare for the interview, effective questioning techniques and documenting the interview.  See also "How to Conduct an Anti-Corruption Investigation: Ten Factors to Consider at the Outset (Part One of Two),” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013); “Developing and Implementing the Investigation Plan (Part Two of Two),” Vol. 3, No. 1 (Jan. 8, 2014).

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  • From Vol. 3 No.4 (Feb. 19, 2014)

    Audit Committee Responsibilities Before, During and After Anti-Corruption Investigations: Five Steps to Take Before the Investigation Begins (Part One of Four)

    The audit committee of a multi-national company has a front-and-center seat for an anti-corruption investigation and the host of unwelcome consequences that can accompany that investigation: multi-million dollar legal bills, media scrutiny, civil litigation and potential civil and criminal sanctions for the company.  The role of an audit committee member is a high-stakes one – he or she can be instrumental in putting the company in the best position if a potential violation is detected and an investigation is needed and can also be held personally liable if a serious violation occurs.  In a four-part series, The FCPA Report is examining fundamental questions regarding the audit committee’s role in internal investigations.  This article, the first in the series, outlines the responsibilities of the audit committee, describes the risks and liabilities the audit committee faces and articulates five steps the audit committee should take before there is cause for investigation.  See also “Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part One of Two),” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013); Part Two of Two, Vol. 2, No. 8 (Apr. 17, 2013).

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  • From Vol. 3 No.1 (Jan. 8, 2014)

    How to Conduct an Anti-Corruption Investigation: Developing and Implementing the Investigation Plan (Part Two of Two)

    Once you have discovered that your company is the subject of an anti-corruption investigation – either one prompted internally or by the government – an investigation plan must be formulated and effectuated.  How can your company marshal resources most efficiently to ensure a thorough investigation?  What are the best methods for conducting interviews and collecting documents?  What should the company do in response to any issues identified by the investigation, and what collateral consequences should it be prepared to deal with?  While no two anti-corruption investigations are the same, this two-part guest article series written by Mara V.J. Senn and Michelle K. Albert, partner and associate, respectively, at Arnold & Porter LLP, walks through the anatomy of a typical investigation and identifies key considerations and best practices at each stage to aid both in-house and outside counsel.  This, the second article in the series, discusses, among other things, developing an investigative plan, strategies for witness interviews and document collection, ten best practices for cross-border investigations, managing the self-reporting calculus and handling remediation and other concerns at the end of the investigation.  The first article detailed typical triggers for investigations and explained ten crucial factors that a company should consider at the start of the investigation.

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  • From Vol. 2 No.25 (Dec. 18, 2013)

    How to Conduct an Anti-Corruption Investigation: Ten Factors to Consider at the Outset (Part One of Two)

    What should you do when a subpoena arrives on your desk, asking about suspected bribe payments to foreign officials?  This two-part guest article series, written by Mara V.J. Senn and Michelle K. Albert, partner and associate, respectively, at Arnold & Porter LLP, walks through the anatomy of a typical investigation and identifies key considerations and best practices at each stage to aid both in-house and outside counsel.  The first article details typical triggers for investigations and explains ten crucial factors that a company should consider at the start of the investigation.  The second article in the series will discuss, among other things, formulating an investigative plan, best practices for cross-border investigations, the self-reporting calculus and concerns collateral to the investigation.  See also “How to Manage a Multi-National Anti-Corruption Investigation,” The FCPA Report, Vol. 2, No. 6 (Mar. 20, 2013).

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  • From Vol. 2 No.23 (Nov. 20, 2013)

    Construction Industry Experts Discuss Crucial Steps in Internal Corruption Investigations, Due Diligence Best Practices and the Value of Cooperation

    Could the construction industry be the next target of anti-corruption enforcement action in the U.S. and abroad?  The industry is rife with risk – in the U.K., for example, 49% of corruption professionals say corruption is widespread, and law firm Reed Smith LLP predicts that at least two large U.K. Bribery Act investigations are in the works in the next two years for international construction firms.  How can construction companies, and others similarly situated, anticipate and mitigate what may be a gathering enforcement storm?  The Practising Law Institute recently sponsored a panel of attorneys with extensive experience in construction contracting who discussed the best ways to enhance compliance for the construction industry, offering lessons applicable to a range of industries.  The panelists analyzed the current global anti-corruption enforcement climate, detailed best practices with regard to due diligence when contracting with third parties in foreign countries, provided steps that a company should take when faced with an FCPA issue, including investigation mistakes companies make, and examined the value of cooperation and voluntary disclosure.  See also “Survey Reveals the Contours and Content of Bribery in the U.K. Construction Industry,” The FCPA Report, Vol. 2, No. 20 (Oct. 9, 2013).

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  • From Vol. 2 No.13 (Jun. 26, 2013)

    Preserving the Attorney-Client Privilege in Cross-Border Internal Investigations

    Under pressure to quickly formulate an investigation plan, attorneys conducting an internal investigation on behalf of a company or board committee can easily overlook the importance of establishing procedures at the outset to ensure the preservation of applicable privileges.  That is a mistake.  In a guest article, James Walker, a partner at Richards Kibbe & Orbe LLP, examines the difficult privilege issues faced by both in-house and outside counsel conducting cross-border internal investigations, including (1) the complexities that arise in connection with conducting witness interviews in cross-border investigations; (2) the difference between the law of privilege in the U.S. and other jurisdictions; (3) the considerations involved when communicating with foreign in-house counsel; and (4) pitfalls associated with ignoring data privacy rules.  See also “Representing Foreign Companies in Criminal FCPA Actions: Strategies for Handling the Legal, Practical and Cultural Challenges,” The FCPA Report, Vol. 2, No. 8 (Apr. 17, 2013).

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  • From Vol. 2 No.9 (May 1, 2013)

    A Guide to Disclosing Corruption Investigations in SEC Filings (Part One of Four)

    When a company becomes aware of a bribery allegation, various difficult decisions materialize.  For public companies, chief among those decisions is whether, when and how to disclose the matter in an SEC filing.  Public companies are required to disclose material information or events affecting the company, but the definition of material can be amorphous, and the stakes are high.  Public disclosure of a corruption problem exposes companies to civil lawsuits, stock price instability, reputational damage, waning employee morale and productivity, loss of current government contracts and debarment from future contracts.  The potential consequences add urgency to the questions: “When does a company have to disclose?” and “How can a company minimize the negative impact of the disclosure?”  The FCPA Report is addressing these questions and others in a four-part series that will serve as a reference guide for disclosing corruption matters in SEC filings.  Specifically, this series will provide guidance on whether and at what stage of an internal investigation to make the disclosure and how to craft language to mitigate the fallout from such disclosure.  In addition to analysis and insight from sources, this series will include a compendium of actual FCPA-related disclosures from recent SEC filings.  These real-world examples of relevant disclosures can serve as precedents for counsel tasked with drafting or reviewing SEC filings relating to an FCPA issue.  This article, the first in the series, discusses: factors that companies should consider when determining whether a public disclosure is appropriate; what experts a company should retain to help it make appropriate disclosure decisions; and the risks and benefits of disclosing at different stages of the anti-corruption investigation.  The second article in this series will: detail the risks inherent in disclosure and non-disclosure; address ways to diminish those risks, including how to handle the media; and discuss best practices when disclosing foreign investigations to the SEC.  The third article will provide insight on the most beneficial language to use in disclosures, and will analyze Wal-Mart's disclosures at different times in its FCPA investigation.  The fourth installment will be the referenced compendium of SEC disclosures, categorized by their attributes.

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  • From Vol. 2 No.9 (May 1, 2013)

    Handling the Challenges of Overseas Anti-Corruption Investigations: Forensic Accountants, Government Expectations, Translators, Upjohn Warnings, Privilege Issues and Recording Interviews

    Internal FCPA investigations do not respect jurisdictional boundaries, and varying customs and laws of different areas critically impact not only internal investigations, but also prosecutions and litigations for multi-national companies that may follow.  Failing to identify and address the specific issues relevant to an anti-corruption investigation can have significant legal and financial consequences.  A recent panel of experts at the American Bar Association’s Institute on Internal Investigations and Forum for In-House Counsel discussed the complexities of internal investigations, sharing their advice on best practices starting with actions to take during the first 72 hours of the investigation.  From both government and private sector perspectives, the panel addressed how to handle language and cultural differences, as well as how to navigate varying legal regimes that affect privilege and complicate the collection of documents.  They also provided insight on interviewing witnesses and how best to deal with the U.S. government when it comes to disclosing an investigation.

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  • From Vol. 2 No.8 (Apr. 17, 2013)

    Representing Foreign Companies in Criminal FCPA Actions: Strategies for Handling the Legal, Practical and Cultural Challenges

    Many FCPA investigations and prosecutions involve foreign companies or foreign subsidiaries of U.S. companies.  When the DOJ investigates or commences a criminal enforcement action against a foreign company, local laws, customs and practices can create challenges for unwary U.S. counsel in areas such as discovery and attorney-client privilege.  A recent event shed light on the topics that frequently come up when dealing with a foreign company client: attorney-client privilege, cross-border discovery, data privacy, obstruction of justice and extradition.  The event participants, all partners at Kaye Scholer LLP, also shared advice on working with in-house counsel in Japan and China and addressed other practical issues specific to the European Union, China and Japan.

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    SEC’s FCPA Unit Chief and Top Practitioners Address the Role of Financial Controls in FCPA Compliance Policies, Internal Investigations, Self-Reporting and Related Topics

    In a recent panel discussion held at the New York City Bar, Kara Brockmeyer, Chief of the SEC’s FCPA Unit, and Mark Schonfeld, a partner at Gibson Dunn & Crutcher LLP, discussed the SEC’s role in civil FCPA enforcement from a private and public perspective.  The panel was moderated by Wayne Carlin, a partner at Wachtell, Lipton, Rosen & Katz.  The three experts shared useful insights regarding managing the costs of FCPA investigations, creating strong compliance programs, negotiating with the SEC and deciding whether to voluntarily disclose a violation to the government.

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  • From Vol. 2 No.6 (Mar. 20, 2013)

    How to Manage a Multi-National Anti-Corruption Investigation

    Managing a single internal anti-bribery investigation that spans multiple jurisdictions requires forethought, coordination, creativity and preparation.  When leading an investigatory team, counsel must consider both the laws and customs of the United States and the laws and customs of the multiple jurisdictions where its client maintains operations.  Counsel also must be mindful of the relationships between various jurisdictions.  Failing to identify and address the specific issues relevant to an investigation can have significant legal and financial consequences.  A panel of experts at the New York City Bar recently shared their insights on how to successfully run a complex international investigation.  The panelists offered advice on, among other things, navigating data privacy laws; protecting the attorney-client privilege; addressing employee rights; and determining whether to voluntarily disclose the results of an internal investigation.

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  • From Vol. 2 No.6 (Mar. 20, 2013)

    How to Defend Individuals Against FCPA Charges (Part Two of Two)

    More individuals have been charged with violations of the FCPA in the past few years than ever before in the statute’s history.  The government has indicated repeatedly that this is a trend they expect to continue.  Accordingly, defending individuals in FCPA matters is becoming increasingly common.  But representing individuals in FCPA cases is different in important ways from defending corporations; the issues faced by corporations whose people are charged are notably different from the issues faced by corporations which themselves are charged.  A panel of experts at the New York City Bar recently shared their insights on salient concerns related to representing individuals facing FCPA charges.  The FCPA Report is synthesizing their advice in a two-part article series.  This article, the second in the series, addresses advising individual FCPA defendants on whether to participate in a company interview; when and how to cooperate with counsel for other individuals; and tips for cooperating with the government.  The first article discussed the primary differences between representing individuals and corporations; the key points to remember when negotiating payment of an individual’s attorney fees; when to enter into and how to draft Joint Defense Agreements; and how to gather information from company counsel.   See “How to Defend Individuals Against FCPA Charges (Part One of Two),” The FCPA Report, Vol. 2, No. 5 (Mar. 6, 2013).

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  • From Vol. 2 No.5 (Mar. 6, 2013)

    How to Defend Individuals Against FCPA Charges (Part One of Two)

    Government officials repeatedly have stated that FCPA charges against individuals will become more frequent.  Accordingly, defending against such charges is expected to become a more common practice among FCPA lawyers.  But defending individuals against FCPA charges is different in important ways from defending corporations; and the issues faced by corporations whose people are charged are notably different from the issues faced by corporations which themselves are charged.  A panel of experts at the New York City Bar recently shared their insights on salient concerns related to representing individuals facing FCPA charges.  The FCPA Report is synthesizing their advice in a two-part article series.  This article, the first in the series, discusses the primary differences between representing individuals and corporations; the key points to remember when negotiating payment of an individual’s attorney fees; when to enter into and how to draft Joint Defense Agreements; and how to gather information from company counsel.  The second article in this series will address advising individual FCPA defendants on whether to participate in a company interview; when and how to cooperate with counsel for other individuals; and tips for cooperating with the government.

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  • From Vol. 2 No.3 (Feb. 6, 2013)

    Conflicting Compliance Obligations: How to Navigate Data Privacy Laws While Performing Internal Investigations and Promoting FCPA Compliance in the E.U. (Part Three of Three)

    To comply with the FCPA, companies must exercise decisive control – they must act quickly and effectively to investigate potential corrupt actions and conduct thorough due diligence.  These actions, coupled with the inevitable time pressure, can put a company in direct conflict with foreign data privacy laws.  Carefully crafting compliance policies and investigation plans can minimize this conflict.  This article, the third in a three-part series, details six steps companies should take at the beginning of an investigation; delves into the issues facing companies that perform internal investigations and conduct due diligence; and offers concrete advice from top practitioners about conducting those activities in a way that minimizes the risk of violating data privacy laws.  The first article in this series discussed the application of data privacy laws to FCPA compliance and the specifics of the E.U. data privacy regime, including: data processing principles; restrictions on data transfer; data transfer mechanisms, including the meaning of “safe harbor status,” binding corporate rules and European model clause agreements; as well as how potential new regulation can affect data collection.  See “Conflicting Compliance Obligations: How to Navigate Data Privacy Laws While Performing Internal Investigations and Promoting FCPA Compliance in the E.U. (Part One of Three),” The FCPA Report, Vol. 2, No. 1 (Jan. 9, 2013).  The second article in this series discussed how France applies the relevant E.U. Directive; best practices for due diligence in France; and six specific steps a company should take before a need to investigate arises in France as well as other E.U. member states and other jurisdictions with similar data privacy regimes.  See “Conflicting Compliance Obligations: How to Navigate Data Privacy Laws While Performing Internal Investigations and Promoting FCPA Compliance in the E.U. (Part Two of Three),” The FCPA Report, Vol. 2, No. 2 (Jan. 23, 2013).

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  • From Vol. 2 No.2 (Jan. 23, 2013)

    Conflicting Compliance Obligations: How to Navigate Data Privacy Laws While Performing Internal Investigations and Promoting FCPA Compliance in the E.U. (Part Two of Three)

    As companies strengthen their anti-corruption compliance programs in response to the domestic enforcement climate, they face an increasing risk of violating data privacy laws across the globe.  With law enforcement and regulators demanding information, companies find themselves trying to please two masters.  Understanding foreign data privacy laws, which often conflict with American notions of privacy, and anticipating problems before they materialize, are key to minimizing conflicts.  France in particular has a strict data privacy regime, and its laws are actively enforced.  This article, the second in a three-part series, discusses how France applies the relevant E.U. Directive; best practices for due diligence in France; and six specific steps a company should take before a need to investigate arises in France as well as other E.U. member states and other jurisdictions with similar data privacy regimes.  The third article in this series will tackle: internal investigation considerations; best practices for reviewing documents and conducting interviews; strategies for transferring data outside the E.U.; data privacy concerns when performing due diligence in the E.U.; and effective techniques for running an anti-corruption hotline in the E.U.  The first article in this series discussed data privacy laws generally and specifically as they relate to FCPA compliance, and provided information about the specifics of the E.U. data privacy regime, including: data processing principles; restrictions on data transfer; data transfer mechanisms, including the meaning of “safe harbor status,” binding corporate rules and European model clause agreements; as well as how potential new regulation can affect data collection.  See “Conflicting Compliance Obligations: How to Navigate Data Privacy Laws While Performing Internal Investigations and Promoting FCPA Compliance in the E.U. (Part One of Three),” The FCPA Report, Vol. 2, No. 1 (Jan. 9, 2013).

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  • From Vol. 2 No.2 (Jan. 23, 2013)

    Specific Strategies from Goldman Sachs, Société Générale and Leading Law Firms on Conducting Cross-Border FCPA Investigations

    The considerable challenges posed by an internal FCPA investigation are compounded when that investigation involves a cross-border component – as it almost invariably does.  In-house and outside counsel in cross-border investigations must navigate legal regimes that often conflict (notably in the area of data privacy); divergent approaches to the attorney-client privilege; varying business and governance structures; and different languages and cultural mores.  Moreover, best practices in the area of cross-border investigations are not codified or neatly packaged; rather, they are a function of long and often arduous experience.  In an effort to identify and communicate some of those best practices, a seasoned panel of in-house and law firm lawyers convened in New York on January 15, 2013 for a panel hosted by Catalyst, an e-discovery services provider.  The panel was moderated by Vasu Muthyala, counsel at O’Melveny & Meyers LLP.  He was joined by Greg Andres, partner at Davis Polk & Wardell LLP; John Driscoll, Managing Director and Director of Litigation and Regulatory Affairs at Société Générale; Justin Shur, partner at Molo Lamken LLP; John Tredennick, Chief Executive Officer of Catalyst; and Christine Chi, Global Head of the Anti-Bribery Group at Goldman Sachs.  The panelists discussed, among other issues: major challenges facing companies performing cross-border investigations, including the differing notions of data privacy and attorney-client privilege in different regions and strategies for coordinating with multiple jurisdictions; tips for conducting a cross-border investigation, including when to retain outside counsel; and the dynamics of reporting, both obligatory reporting via a Suspicious Activity Report and voluntary disclosure, especially in the current whistleblower climate.

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  • From Vol. 1 No.14 (Dec. 12, 2012)

    Integral Elements of Proactive and Pre-Merger Anti-Corruption Forensic Audits

    The last five years of FCPA enforcement have increased the need for comprehensive and effective compliance programs and controls designed to detect, deter and remediate instances of bribery and corruption.  A hidden jewel for some organizations is the use of the forensic audit function to help achieve these objectives.  A properly staffed and well-trained forensic audit team can provide a positive return on investment if used appropriately to satisfy the new imperative of a well-functioning compliance program.  Conducted competently, forensic audits can go a long way toward preventing violations, detecting violations (including in the merger and acquisition process), aiding the investigative and remedial process, substantiating the existence, amounts and recipients of payments and ultimately helping a company earn credit when negotiating with the government or self-reporting discovered violations.  See “When and How Should Companies Self-Report FCPA Violations? (Part Two of Two),” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).  In a guest article, Paul E. Zikmund, Global Director, Ethics and Compliance, at Bunge Limited, discusses the core elements of proactive FCPA audits, as well as the key mechanics of pre-merger anti-corruption forensic audits.

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  • From Vol. 1 No.13 (Nov. 28, 2012)

    Nine Steps to Take When Initiating an Internal FCPA Investigation

    On November 14, 2012, a panel sponsored by compliance software provider Catelas Inc. (Catelas) discussed the considerations involved in investigating bribery related compliance incidents and other wrongdoing.  The panel was a follow up to Catelas’ November 7, 2012 panel about monitoring third-party business relationships with a view to assuring FCPA compliance and managing other risks.  See “Managing FCPA and Other Risks After Onboarding a Third Party,” The FCPA Report, Vol. 1, No. 12 (Nov. 14, 2012).

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  • From Vol. 1 No.12 (Nov. 14, 2012)

    Strategies for Preserving Data Before and During an FCPA Investigation

    Companies operating in today’s international marketplace create and distribute mass quantities of electronically stored information.  On any given day, a multinational company’s employees may write and distribute thousands of e-mails, letters, text messages, instant messages and other electronic documents.  If not handled properly, such information can create significant risks for global organizations, potential subjects of FCPA (and other) investigations.  Failing to create and implement a comprehensive data preservation policy prior to the start of an investigation or inquiry can have dire consequences, particularly if documents are inadvertently destroyed after a preservation duty develops.  Handling data correctly – both before and during an FCPA investigation – is straightforward in theory but challenging in practice.  This article provides insight on how best to deal with the mountain of data relevant to an investigation, including how a company can insulate itself proactively from the risks caused by poor data management; the importance of creating, implementing and enforcing a comprehensive data preservation plan prior to the triggering of a preservation obligation; how to determine when a preservation obligation arises; and best practices for implementing a litigation hold after the obligation has arisen.

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  • From Vol. 1 No.9 (Oct. 3, 2012)

    Anonymous Polling, Focus Groups and “Organizational Justice” Help Companies Avoid FCPA Violations While Growing Revenue

    The notion that anti-bribery compliance and revenue generation are at odds has a superficial appeal and a long tradition.  But the notion does not hold up under theoretical scrutiny, and it has been discredited empirically.  As a theoretical matter, it makes good sense that a culture of ethics and excellence leads to high long-term returns, while a culture of bribery leads to misallocation of resources, among other problems.  And as an empirical matter, deep research by CEB (formerly the Corporate Executive Board), along with CEB’s extensive advisory experience, highlight a strong correlation between long-term revenue growth and a corporate culture of integrity.  “Integrity capital,” as CEB calls it, is not just the right thing to do or, less charitably, applied sanctimoniousness.  Rather, it is good business and effective strategy.  Working from an interview with Tracy Davis Bradley, a senior director at CEB; a recent article by Dan Currell, an executive director at CEB, and Bradley in the Harvard Business Review; as well as research provided to The FCPA Report by CEB, this article sheds light on some of the footpaths connecting ethics and revenue.  In particular, this article outlines specific steps that companies can take to avoid FCPA violations while simultaneously driving business growth; why the shaky economy may be driving bribery in developing countries; how integrity capital can help businesses’ bottom lines; how companies can make their hotlines more effective; how anonymous polling and focus groups, if done well, can yield surprisingly good results; and why companies should not only consistently and quickly punish offenders, but give recognition to employees who report wrongdoing.

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  • From Vol. 1 No.9 (Oct. 3, 2012)

    Anti-Corruption Compliance in the Age of Global Enforcement

    A global wave of anti-corruption regulation has been steadily gaining momentum since it began in the 1990s.  International organizations, such as the Organisation for Economic Co-operation and Development, have set their sights on fighting bribery and have successfully pressured member states to pass tighter laws.  Cross-border enforcement cooperation is also on the rise.  This heightened scrutiny has highlighted the importance for corporations to have globally effective anti-corruption compliance programs.  Successful programs help reduce the risk of violations and may also engender a more favorable regulatory response when issues arise.  In a guest article, Richard Sibery, the Leader for Fraud and Investigations with Ernst & Young LLP’s Fraud Investigation & Dispute Services (FIDS) practice, and Virginia Adams, a Senior Manager in E&Y’s FIDS practice, discuss the three basic building blocks of a best-of-breed compliance program.  For additional insight from Sibery, see “Training, Certification, Due Diligence, Customs Clearance and Facilitation Payments: An Interview with Leaders of Ernst & Young’s Fraud Investigation & Dispute Services Practice,” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012); and “Anti-Corruption Audits, Risk Assessments, Transaction Testing and the Dangers of Petty Cash: An Interview with Leaders of Ernst & Young’s Fraud Investigation & Dispute Services Practice,” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).

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  • From Vol. 1 No.8 (Sep. 19, 2012)

    When, Why and How Should Companies Discipline Employees for FCPA Violations?

    When a company discovers an FCPA violation, and is faced with formulating a strategy to remediate the problem, one of the important and delicate considerations it must make is how to discipline the employees involved.  There are competing interests at work – the company needs to show the DOJ and the SEC that it reacted promptly and decisively, but it also must induce cooperation from key individuals in order to get to the root of the problem.  Termination may be appropriate for some employees, but companies must do so properly so as not to trigger retaliation; and other forms of discipline may be appropriate for employees with a less central role in the prohibited activities.  Determining the best proactive procedures to prevent misconduct, as well as the best reactive procedures once there has been a violation, and remedial measures to prevent reoccurrence, are paramount to minimize liability.  The government, once it is involved, may also pressure the company to take disciplinary action.  A further challenge hinges on the fact that information being provided in cooperating with the company, since it is not privileged, may be provided to the government for use in a possible criminal investigation.  This article provides context and practical guidance to companies navigating the disciplinary process.  In particular, this article discusses the application of the FCPA to employee conduct and how the government has treated employee discipline in the FCPA context.  Based on insight from experienced FCPA practitioners, this article addresses how to balance discipline with cooperation from employees during an internal investigation; strategies for inducing cooperation during the investigation; the privilege implications of cooperation; and considerations a company should weigh in considering disciplinary action, including government pressure and scrutiny of decisions, seniority of management, as well as disciplinary challenges in different jurisdictions.

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  • From Vol. 1 No.7 (Sep. 5, 2012)

    Fines, Victims, the Three Buckets of FCPA Costs and FCPA Reform: An Interview with Mike Koehler, the FCPA Professor (Part Two of Two)

    The FCPA Report recently interviewed Mike Koehler, Assistant Professor at Southern Illinois University School of Law, author of the popular blog the FCPA Professor and outspoken critic of the current FCPA enforcement regime.  This article includes the second part of our interview with Professor Koehler.  In this part, Professor Koehler addresses recent Supreme Court precedent affecting corporate fines; the potential for fines to be paid to victims instead of the U.S. Treasury; the cost-benefit analysis of FCPA compliance and the three buckets of FCPA costs; his distinction between license/permit cases and government procurement cases and its importance for compliance policies and procedures; and the prospect of FCPA reform, a topic on which Professor Koehler disagrees with Judge Sporkin.  For the first part of our interview with Professor Koehler, see “Compliance Implications of the Current Enforcement Climate: An Interview with Mike Koehler, the FCPA Professor (Part One of Two),” The FCPA Report, Vol. 1, No. 6 (Aug. 22, 2012).

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  • From Vol. 1 No.3 (Jul. 11, 2012)

    Orthofix International Agrees to Pay $7.5 Million to the SEC and DOJ to Settle Charges that It Bribed Mexican Officials with “Chocolates”

    In a July 10, 2012 complaint, the SEC charged a Texas-based medical device company, Orthofix International N.V., with engaging in a seven-year bribery scheme involving its Mexican subsidiary Promeca S.A. de C.V. (Promeca).  The SEC alleges that Promeca employees referred to the bribe payments, which totaled over $300,000, as “chocolates.”

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