Financial Regulation and Compliance: How to Manage Competing and Overlapping Regulatory Oversight, + Website

CHAPTER 13 How to Conduct Internal Investigations

The importance of conducting effective internal investigations as part of a company's overall compliance program cannot be overstated. Very often, company liability derives from an allegation initially raised internally which either is disclosed to a regulator or referenced in a lawsuit. These allegations can lead to Enforcement proceedings by any number of regulatory Agencies and even criminal exposure, particularly in the FCPA context.

13.1 LIMITING EXPOSURE THROUGH EFFECTIVE INTERNAL INVESTIGATIONS

Companies can effectively limit their legal exposure whether in the context of a potential FCPA claim or as a result of a whistleblower or other complaint by conducting a thorough and comprehensive internal investigation. A thorough, effective, and credible internal investigation is important not only so that the company understands fully what it is facing in terms of liability, but also to demonstrate to the regulatory authorities that it takes the complaints it receives seriously, and that it wishes to learn about potential problems within the company.

As discussed in Chapter 3, whistleblower complaints must be managed very carefully and it is critical that the whistleblower feel as if his or her complaints are being addressed and that follow-up is occurring on the specific allegations brought forward. In fact, whether the complaint is brought by a whistleblower or information is brought to the attention of the company through ...