DOJ Official Spells Out Criteria For Effective Internal Investigations

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By Yin Wilczek

May 14 — A good internal investigation should determine the scope of the matter at hand, as well as the compliance or cultural shortfalls that led to the problem, a senior Justice Department official said May 12.

Assistant Attorney General Leslie Caldwell, chief of the DOJ's Criminal Division, also noted that internal investigations and corporate cooperation are particularly helpful to the department where the criminal conduct existed for a long time, or where relevant documents or witnesses are dispersed or located abroad.

In remarks to the New York City Bar Association, Caldwell cited the DOJ's ongoing efforts to provide more details in its resolutions as to how cooperation was rewarded. As a “prime example” of that transparency, she pointed to the department's recent deferred prosecution agreement with Deutsche Bank AG over London Interbank Offered Rate (LIBOR) manipulation charges.

Proactive Steps 

“The DPA itself spelled out the factors we took into consideration, including a detailed description of what Deutsche Bank did right in terms of cooperation, and where they fell short,” Caldwell said. One specific area in which the bank was inadequate was that it was not “particularly proactive” in its internal investigation and disclosures compared to other firms accused of LIBOR problems, she said.

“For example, there was significant conduct by Deutsche Bank that we learned about, not from Deutsche Bank, but from the other institutions,” Caldwell said. “The lesson here is—if you don’t cooperate fully and don’t disclose fully—someone else just might do so, and possibly to your detriment.”

In April, Deutsche Bank AG was ordered to pay a record $2.5 billion in fines and fire seven employees to settle U.S. and U.K. investigations into its role in rigging LIBOR benchmark rates.

The DOJ fined the bank $775 million, which was the largest penalty ever imposed by the department in a LIBOR investigation, Caldwell said. She added that the case also was the first in which the DOJ imposed a monitor on a bank in connection with a LIBOR matter.

‘Regulatory Piling On.'

In other discussions, Caldwell said the department has heard organizations' concerns about “regulatory piling on”—the potential for multiple sanctions for misconduct as a result of multiple investigations and cooperation by global law enforcers. “We agree that there is the potential for unfairness when a company is asked to pay for things over and over again,” she said.

The DOJ is trying to address this concern so that companies are not unfairly punished, Caldwell said. However, “that is often easier said than done.”

Caldwell has stressed corporate cooperation in other recent speeches.

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To contact the editor responsible for this story: Ryan Tuck at

The text of the speech is available at