Internal Corporate Investigations

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.