Corporate Internal Probes Should Be Thoughtful

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By Michael Greene

Aug. 12 — Companies should be thoughtful about the way they conduct internal investigations, especially when considering how to cooperate with the government and what types of remedial actions to take, attorneys said Aug. 11.

At a Practising Law Institute webcast, Helen V. Cantwell, a New York-based partner at Debevoise & Plimpton LLP, said the most important advice she gives her clients in conducting internal investigations is that “one size doesn't fit all.”

“You do not need an army of lawyers to descend on every single problem,” she said.

Cantwell added that recent statements by the Department of Justice indicate that the government does not expect companies to investigate every corner of the universe.

Taking Remedial Action

In terms of what the government considers in prosecuting companies, Telemachus P. Kasulis, deputy chief of the Securities and Commodities Fraud Task Force at the U.S. Attorney’s Office for the Southern District of New York, said that restitution and remedial action, and cooperation with the government are particularly important in internal probes because they are the only factors an organization has direct control over by the time external counsel typically intervenes.

Kasulis said it can be of “great comfort” to the government if the corporation self-reports or provides all of the relevant facts and states what it is doing to make things better. In particular, one thing companies can do to get in front of the problem is to disclose the steps they took to undo the harm, he said.

Kasulis said he spoke his own views and not on behalf of the government.

Credit for Transparency?

However, Cantwell noted that sometimes there are instances where counsel starts an internal investigation and there may be uncertainty as to whether a crime has been committed. She observed that this situation can create some tension in trying to get cooperation credit with the government.

Kasulis stated that deciding what to tell the government can be to an extent a question of strategy and that he favored increased transparency. He said that from the perspective of a government attorney, “the more you can tell us, the sooner you can tell us, the better it will be,” even if you haven't reached the conclusion that a crime has occurred.

Attorney-Client Privilege 

The attorneys also discussed whether it is in a client's best interest to provide the government with information that is protected by attorney-client or work product privileges.

Cantwell noted that she often advises her client not to waive privilege and that at the onset of oral presentations with the government, her firm will disclose that it is doing so. However, she hypothesized that this rigid approach to waiver may make interactions appear less transparent and natural.

In response, Kasulis noted that the government scrupulously follows its policy of not asking for privileged information. He also stated that attorneys, as advocates, must find the best way to convince others of their position. The government is constrained by certain factors, but defense attorneys can decide, in the best interests of their clients, to provide more information than the government can ask for, he said.

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To contact the editor responsible for this story: Yin Wilczek at