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Internal Corporate Investigations
Internal Corporate Investigations guides corporations and nonprofits through the planning, execution and reporting of internal investigations with legal care and strategic focus. Addressing inquiries prompted by alleged misconduct, regulatory demands or litigation, this annual resource helps organizations manage risk, support compliance efforts and protect their legal position across complex regulatory settings.
Publisher: Matthew Bender
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Internal Corporate Investigations is an essential resource for corporations and nonprofits facing heightened regulatory scrutiny and litigation risk. Internal investigations have become a central governance function, whether initiated proactively to assess potential misconduct or undertaken in response to government action or court mandate. These matters demand disciplined judgment, careful planning and a strong understanding of legal exposure.
This treatise provides a practical framework for conducting internal investigations from start to finish. It begins with the historical development and strategic value of internal investigations, then examines threshold decisions such as whether to investigate, who should control the process and who should conduct the inquiry. Readers gain guidance on establishing authority, creating an investigative plan and managing disclosure and communications.
The book offers detailed discussion of core investigative techniques, including document review, interviews and questionnaires, along with direction on preparing clear and defensible investigative reports. It also addresses critical legal considerations such as confidentiality, attorney-client privilege, work-product protection and potential liability risks, including defamation and related torts.
Dedicated chapters explore investigations arising from derivative suits, bankruptcy proceedings, government procurement matters and state and local agency inquiries. The role of boards, special litigation committees and counsel is analyzed in depth, helping organizations navigate investigations that may affect governance, reputation and long-term viability.
Written for corporate attorneys, compliance officers, nonprofit leaders and board members, Internal Corporate Investigations equips readers with structured guidance to conduct thorough, legally sound inquiries and respond confidently to today’s enforcement and regulatory challenges.
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CHAPTER 1 INTRODUCTION
§ 1.01 History of Internal Investigations
§ 1.02 Historical Background
§ 1.03 Uses of Internal Investigations
CHAPTER 2 INITIAL DECISIONS OF WHETHER AND HOW TO INVESTIGATE
§ 2.01 Whether to Investigate.
§ 2.02 Who Controls the Investigation?
[1] Overview.
[2] Factors to Consider Concerning Control of the Investigation.
[a] Overview.
[b] Impartiality.
[3] Control When Investigation Results From Governmental Litigation or a Consent Order.
[4] Control When Investigation Concerns Whether To Pursue Derivative Claim.
§ 2.03 Who Conducts the Investigation?
[1] Introduction.
[2] In House Counsel.
[3] Regular Outside General Counsel.
[4] Special Outside Counsel.
[5] Regular Outside Auditors or “Special” Auditors.
[6] Conduct of a Special Litigation Committee Investigation in the Context of a Derivative Suit.
CHAPTER 3 PRELIMINARY PROCEDURES
§ 3.01 Authority To Investigate.
[1] Preliminary Procedures
[2] The Need for an “Investigative Plan.”
[3] Documents Constituting the Investigative Plan.
§ 3.02 Disclosure of the Investigation.
§ 3.03 Preliminary Inquiry.
[1] Overview.
[2] Consultation With Management.
[3] Review of Prior Investigative Records.
[4] Preliminary Report.
CHAPTER 4 CONDUCTING THE INVESTIGATION
§ 4.01 Introduction.
§ 4.02 Document Review.
[1] Overview.
[2] “Pre–Assembled” Corporate Documents.
[3] Files Maintained by Employees.
[4] Raw Corporate Data.
[5] Third Party Documents.
[6] Review and Use of Physical (“Hard”) Documents.
[7] Electronic Document Review
§ 4.03 Questionnaires.
[1] Benefits and Costs.
[2] Choice of Questionnaire Recipients.
[3] Transmittal Letter.
[4] Format of Questionnaire; Follow–up Questions.
§ 4.04 Interviews.
[1] Conduct of Interview.
[2] An Employee’s Refusal to Submit to Interview.
[3] Interview Memoranda.
§ 4.04 Use of Private Investigators and Undercover Agents.
CHAPTER 5 REPORT OF THE INVESTIGATION
§5.01 Overview.
§5.02Whether to Create a Written Report.
§5.03 Recipients of the Report.
§5.04Contents and Level of Detail.
§ 5.05 Solicitation of Comments by Affected Persons.
§ 5.06 Drafting Techniques.
§ 5.07 Destruction of Drafts.
CHAPTER 6 MAINTAINING CONFIDENTIALITY OF INFORMATION UNCOVERED BY INVESTIGATION
§ 6.01 Overview.
§ 6.02 Considerations Affecting the Decision to Assert Privilege In Order to Retain the Confidentiality of Information.
[1] Reasons to Maintain Confidentiality
[2] Reasons to not Insist on Confidentiality
§ 6.03 Attorney–Client Privilege.
[1] Introduction.
[2] A Purpose of the Investigation Must be to Obtain Confidential Legal Advice.
[3] Materials Within the Privilege.
[4] Existence of Attorney–Client Relationship.
§ 6.04 Attorney Work–Product Doctrine.
[1] Overview.
[2] Anticipation of Litigation.
[3] Materials Within the Protection.
§ 6.05 Joint Defense or Common Interest Privilege.
§ 6.06 “Self–Evaluative” Privilege.
§ 6.07 Waiver, Confidentiality Agreements, and Exceptions.
[1] The Rudiments.
[2] Waiver.
[3] Confidentiality Agreements.
[4] Crime–Fraud Exception.
§ 6.08 Discovery by Shareholders and the Public in Derivative Litigation.
CHAPTER 7 GUARDING AGAINST LIABILITY FOR DEFAMATION AND OTHER TORTS
§ 7.01 Overview.
§ 7.02 Steps to Minimize Risk of Liability.
§ 7.03 Privilege: Court–Ordered Investigations.
[1] Introduction.
[2] Statements in Connection with Judicial Proceedings.
[3] Court–Ordered Statements.
[4] Conduct of Quasi–Judicial or Other Official Person.
[5] Practical Considerations.
§ 7.04 Privilege: Corporation–Initiated Investigations.
[1] Introduction.
[2] Statements Required by Law.
[3] Statements to Government Officials.
CHAPTER 8 SPECIAL CONSIDERATIONS APPLICABLE TO INVESTIGATIONS ARISING OUT OF DERIVATIVE SUITS
§ 8.01 Overview.
§ 8.02 The Business Judgment Rule.
§ 8.03 Appointment of Special Litigation Committee.
§ 8.04 Staying Discovery.
§ 8.05 Considering the Best Interests of the Corporation.
§ 8.06 Pursuing or Dismissing the Claims.
CHAPTER 9 SPECIAL CONSIDERATIONS APPLICABLE TO BANKRUPTCY TRUSTEE OR EXAMINER INVESTIGATIONS
§ 9.01 Introduction.
§ 9.02 Statutory Scheme.
[1] Overview.
[2] Appointment of Trustee or Examiner.
[a] Introduction.
[b] Process for Appointing a Trustee or Examiner.
[c] Considerations in Deciding Whether to Appoint a Trustee or Examiner.
[3] Investigative Duties of Trustee or Examiner.
[4] Court Approval of Retention of Counsel and Other Professionals.
[5] Duty of Fairness and Impartiality.
§ 9.03 Parallel Internal Investigations.
[1] Introduction.
[2] Benefits of Parallel Investigations.
[3] Issues Raised by Parallel Investigations.
[a] Coordination Among Parallel Investigations.
[b] Duplication of Expenses.
§ 9.04 Investigative Procedures.
[1] Procedures in Common With Other Investigations.
[a] Overview.
[b] Interviews.
[c] Document Review.
[d] Questionnaires.
[2] Special Procedures.
[a] Subpoena Power and Formal Examinations.
[i] In General.
[ii] Interview or Formal Examination?
[iii] Application for Subpoena.
[iv] Response of Counsel for Witness.
[v] Procedure at Formal Examination.
[b] Obtaining Information from Debtor’s Counsel.
[c] Obtaining Information from Guilty Plea Defendants.
[i] Reasons Not to Cooperate.
[ii] Leverage of Trustee or Examiner.
[iii] Negotiating Techniques.
§ 9.05 Coordination With Creditors
[1] Introduction.
[2] Omnibus Order Concerning Investigative Procedure.
[3] Document Electronic Depository.
[4] Informal Coordination.
§ 9.06 Coordination with Governmental Investigations
§ 9.07 Report of the Investigation
[1] Preparation.
[2] Distribution.
§ 9.08 Guarding Against Liability for Defamation and Other Torts.
[1] In General.
[2] Privileges and Immunities.
[a] Overview.
[b] Absolute Immunity.
[c] Absolute Privilege.
[d] Qualified Privilege.
CHAPTER 10 SPECIAL CONSIDERATIONS APPLICABLE TO INVESTIGATIONS CONCERNING GOVERNMENT PROCUREMENT CONTRACTS
§ 10.01 Introduction.
§ 10.02 Applicable Statutes.
[1] Overview.
[2] False Statements Act, 18 U.S.C. § 1001.
[3] False Claims Act (Criminal), 18 U.S.C. § 287.
[4] Conspiracy, 18 U.S.C. § 371.
[5] False Claims Act (Civil), 31 U.S.C. § 3729.
[6] Major Fraud Act, 18 U.S.C. § 1031.
[7] The Anti-Kickback Enforcement Act of 1986, 41 U.S.C. §§ 8701-8707.
[8] State Statutes.
§ 10.03 Reasons to Investigate and Disclose.
[1] Reasons to Investigate and Disclose Before Government Inquiry.
[a] In General.
[b] Suspension and Debarment.
[c] Qui Tam Lawsuits.
[d] False Claims Act Penalty Provisions.
[e] The Need to Remedy Past Violations and Prevent Future Violations.
[2] Reasons to Investigate/Disclose After a Government Inquiry or Qui Tam Lawsuit Has Been Commenced.
§ 10.04 Creating a Framework for Cooperation.
§ 10.05 Remedial Action.
[1] Discipline of Employees.
[2] Other Remedial Actions.
CHAPTER 11 STATE AND LOCAL INVESTIGATIVE AGENCIES
§ 11.01 Introduction.
§ 11.02 The New York Attorney General’s Office.
[1] Overview.
[2] The Labor Bureau.
[3] New York Environmental Protection Bureau.
[4] The Charities Bureau.
[5] The Consumer Frauds Bureau.
[6] The Bureau of Internet and Technology.
§ 11.03 The New York State Department of Financial Services (DFS).
[1] Introduction.
[2] New York State’s Department of Financial Services Consumer Protection.
[3] New York’s Fair Lending Laws.
[4] DFS Oversight of Cyber Security Issues.
§ 11.04 The District Attorneys’ Offices.
§ 11.05 The New York City Department of Investigation.