Effective Internal Investigations
Question: Why should our company conduct an internal investigation following a whistleblower complaint?
Answer: Effective internal investigations are an important part of any company’s compliance program. When an issue is identified, either through a whistleblower’s complaint or independently by a compliance officer, compliance team should be ready to lead a thorough internal investigation. Conducting an internal investigation has several benefits for the company. First, it is an efficient way of gathering facts and making an assessment of legal exposure. Second, effective internal investigation may provide for an opportunity to timely stop any ongoing improper activity and remediate any wrongdoing already committed. Third, internal investigation’s findings may help determine whether any disclosure to regulators or investors is warranted. In addition, should any regulatory or civil action occur down the road, properly conducted internal investigation would help prepare a defense for such action and will make the defense process less disruptive for the operation of the company.
In order to initiate an internal investigation, one should first assess the complaint and determine whether the allegations raised in the complaint are specific and credible. The next step would be understanding the nature of the issue raised and determining whether any immediate action is necessary. Then, for information preservation purposes, one should identify the relevant data sources and custodians and conduct initial interviews with the relevant individuals, taking into account privilege issues. When fact gathering is completed, consider who should be receiving the report of investigation, for example, a company’s audit committee or the board of directors. In addition to privilege considerations, the issue of independence is critical for effective implementation of the report’s recommendations. Depending on the nature of the findings, consider, in consultation with your legal counsel, whether self-disclosure to enforcement authorities is warranted.
*The contents of this message, current at the date of publication, are for reference and general informational purposes only and do not constitute legal advice. You should contact your attorney to obtain advice with respect to any particular legal matter. You should not act or refrain from acting on the basis of information in this publication without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.
Question: Why should our company conduct an internal investigation following a whistleblower complaint?
Answer: Effective internal investigations are an important part of any company’s compliance program. When an issue is identified, either through a whistleblower’s complaint or independently by a compliance officer, compliance team should be ready to lead a thorough internal investigation. Conducting an internal investigation has several benefits for the company. First, it is an efficient way of gathering facts and making an assessment of legal exposure. Second, effective internal investigation may provide for an opportunity to timely stop any ongoing improper activity and remediate any wrongdoing already committed. Third, internal investigation’s findings may help determine whether any disclosure to regulators or investors is warranted. In addition, should any regulatory or civil action occur down the road, properly conducted internal investigation would help prepare a defense for such action and will make the defense process less disruptive for the operation of the company.
In order to initiate an internal investigation, one should first assess the complaint and determine whether the allegations raised in the complaint are specific and credible. The next step would be understanding the nature of the issue raised and determining whether any immediate action is necessary. Then, for information preservation purposes, one should identify the relevant data sources and custodians and conduct initial interviews with the relevant individuals, taking into account privilege issues. When fact gathering is completed, consider who should be receiving the report of investigation, for example, a company’s audit committee or the board of directors. In addition to privilege considerations, the issue of independence is critical for effective implementation of the report’s recommendations. Depending on the nature of the findings, consider, in consultation with your legal counsel, whether self-disclosure to enforcement authorities is warranted.
*The contents of this message, current at the date of publication, are for reference and general informational purposes only and do not constitute legal advice. You should contact your attorney to obtain advice with respect to any particular legal matter. You should not act or refrain from acting on the basis of information in this publication without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.
