Corporate Internal Investigations

1. Corporate Internal Investigations Brad D. Brian 896318v1

2. Why Conduct An Internal Corporate Investigation • Determine facts • Identify wrongdoers, if any • Assess company’s legal exposure, if any • Determine whether there was wrongdoing • Respond to government and media inquiries • Preserve or even enhance company’s reputation and customer relations • Take corrective action

3. Types of Internal Investigations Reactive Proactive

4. First Steps in the Investigation • Deciding whether to conduct the investigation • Defining the scope of the investigation • Applying the rules of privilege and confidentiality, if applicable • Assembling the investigative team • Anticipating what can go wrong • Establishing lines of reporting and supervision

5. Factors in Deciding Whether To Conduct an Internal Investigation • Existence of government investigation or lawsuit • Existence/potential for whistleblower • Ability to learn facts and formulate defenses • Option to make voluntary disclosure • Duty to investigate report of material securities law violation (Sarbanes-Oxley) • Good corporate governance: Don’t ignore warning signs!

6. Assembling the Investigative Team • Lawyers vs. non-lawyers • In-house personnel vs. outside firm • Roles of Non-Lawyers

7. Developing The Investigative Plan • Assemble and secure relevant documents • Identify relevant witnesses • Prioritize witness interviews • Identify key factual and legal issues • Identify and retain necessary experts, if any

8. Establishing Lines of Reporting and Supervision • To whom? • General counsel? • Management? • Board of Directors? • Audit Committee of Board of Directors? • Considerations • Type of investigation • Severity of matter • Involvement of employees/officers as witnesses or subjects • New post-Enron rules (Sarbanes-Oxley)

9. Control and Organizationof Documents • Written instruction to preserve documents • Get possession of relevant documents • Record where documents came from • Retain originals in the form sent • Organize documents by: • Subject • Witness

10. Employees’ Rights and Obligations • Duty to Cooperate in Investigation • Produce all company records • Consent to interview in internal investigation • Possible Employment Rights • Right to counsel • Right to have union representative present • Legal fees • Notice of investigation • Right to receive report of investigation?

11. Witness Interviews • Always have 2 persons attend each interview • Ways to memorialize witness interviews: • Handwritten notes • Memoranda of interview • Tape recording • Signed witness statement • Witness Admonitions • Potential application of FCRA

12. Admonitions Before Interviews of Company Employees • Represent company, not individual employee • Retained to investigate facts and give legal advice • Interview is protected by attorney-client privilege • Employee should keep interview confidential • It is vital that employee tell the truth • Privilege belongs to company, not employee • Privilege can be waived without employee’s consent • Contents of interview can be disclosed to third parties (including government agencies) and to company management

13. Internal Report of Investigation • Whether to create a report – factors to consider • To whom should report be addressed • Content of report • Possible obligation to report under Sarbanes-Oxley

14. Report to Government • Factors bearing on whether to report • Legal obligation to disclose • Voluntary disclosure program? • Avoiding ongoing liability • Preserving company reputation • Likelihood facts will come out independently • Impact of disclosure on privilege • Oral vs. written submission

15. Corrective Actions • Measures to prevent recurrence • Revisions to company procedures and policies • Employee discipline • Correction to books and records

16. Legal Representation of Employees • Should company counsel represent employees • Separate representation for employees • Representation of multiple employees by single outside attorney • Joint Defense Agreements • Right of counsel to be present during government interviews

17. Steps to Prevent Obstruction of Justice Claim • Preserve documents • Have 2 people present at each witness interview • Advice to employees on response to investigators’ inquiries • Memorialize instructions to witnesses to “tell the truth” • Do not pressure or mislead witnesses

18. Government Investigations • Be courteous • Cooperate, but preserve company’s legal rights • Maintain record of materials provided to government • Submissions to government respecting investigation Do Not Lose Sight of Bigger Goal: To Preserve Company’s Reputation