In his nineteenth century magnum opus, The Common Law, former U.S. Supreme Court Justice Oliver Wendell Holmes cogently observed that “the life of the law has not been logic; it has been experience.” The prescience of Holmes’s words and the collaborative spirit prodded by experience animate the most recent edition of Internal Corporate Investigation, Fourth Edition (Brad D. Brian, Barry F. McNeil, & Lisa J. Demsky eds., 2018). The editors are litigators with substantial experience in internal corporate investigations; and—if their experience in the subject matter was insufficient to please the cognoscenti—their résumés boast law degrees from Harvard and Yale, federal appellate clerkships, and law review membership. Editorial credibility aside, the critical relevance of internal corporate investigations to everyday American life is signified throughout this volume.
Much like a perfectly detailed law school outline, each of the 15 chapters in this edition has subheadings within each chapter that allow the reader to understand the subject of the chapter in granular detail. Each chapter is written by attorneys who provide in-the-trenches observations and guidance to those seeking particular information on specific issues in internal corporate investigations. In the foreword, Mary Jo White, former U.S. attorney in the Southern District of New York and former SEC chairman, recommends the book to all lawyers involved in internal corporate investigations. In Chairman White’s words, “[t]he use of internal investigation as a means for companies to deal with potential misconduct has become an essential tenet of corporate best practices in the past 20 years.”
With Chairman White’s words in mind, the reader is then immersed into the substance of internal corporate investigations. Chapters 1 through 5 give an overview of the personnel, tools, and information that are critical for a corporation, regulator, or government to consider when a corporate investigation is imminent or ongoing. Corporate investigations may be either proactive or reactive, we are told, and companies must identify key personnel responsible for aspects of the business who will serve as information resources in the event of an investigation by a regulator or government agency.
On the other hand, regulators and government agencies have tools at their disposal that will facilitate corporate investigations, including, among others, non-prosecution agreements (NPAs), deferred prosecution agreements (DPAs), and whistleblower regulations. NPAs and DPAs allow the government to shape corporate behavior by “preventing wrongdoing and correcting improper behavior without the collateral consequences of an indictment or conviction.” Whistleblower statutes provide substantial financial incentives to encourage employees or citizens with personal knowledge to provide critical information that a government or regulator could use to compel a corporation to settle an investigation or else face prosecution or other negative publicity.
The first volume of Internal Corporate Investigations was published in 1992, prior to the onset of DPAs, NPAs, and various Department of Justice (DOJ) memoranda—including the Holder, Yates, Thompson, McNulty, and Filip Memoranda—that shaped corporate behavior by granting cooperation credit to a company that assisted government investigators once an investigation commenced. In addition, Sarbanes-Oxley (SOX) and the Dodd-Frank Act gave securities regulators additional tools that corporations had to be mindful of when drafting their own internal corporate policies and practices. This updated edition addresses each of the foregoing developments in depth.
Throughout this volume, the editors make reference to Greek mythology to capture the manifold issues presented when a corporate investigation is commenced. For example, counsel representing a corporation in the event of a restatement of financials, we are told, may feel as if they are battling “the mythological hydra” because after one “beast’s head is dealt a seemingly fatal blow, its other heads rear in their full terror.” In parallel proceedings, the reader learns that courts have not been generous toward defendants stuck between the “Scylla of providing civil testimony and the Charybdis of invoking the Fifth Amendment.”
Counsel involved in internal investigations could thumb through Chapter 6 to learn the law and key considerations in perjury and obstruction of justice charges. To avoid perjury and obstruction of justice charges, perhaps counsel could consult Chapter 7 to learn about what should be disclosed to regulators and the government by a proactive company that conducts its own internal investigation into allegations of corporate wrongdoing. The role of the special litigation committee in keeping internal investigations confidential so as not to alert potential wrongdoers is explored in Chapter 8. The deliverable from the special litigation committee—report of the investigation—is examined in Chapter 9.
The final five chapters in the volume go into granular detail regarding the main areas of corporate investigations. Chapter 10 discusses internal investigations for government contractors, including False Claim Act and qui tam lawsuits brought by concerned citizens. Internal investigations into securities law is the hefty subject of Chapter 11. The unique challenges of health care internal investigations, including the various laws that must be considered in that context, are the subject of Chapter 12. The critical role of the Foreign Corrupt Practices Act from an in-house perspective is offered in Chapter 13. Antitrust investigation and its nuances are the subject of Chapter 14. Finally, Chapter 15 goes into great detail on SOX and investigations prompted as result of that law and deserving of its own analysis.
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