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When a company is suspected to have engaged in improper conduct or white-collar crime, an internal investigation into the matter may be warranted. Gathering information through an internal investigation can help a corporation potentially stamp out and eliminate problematic conduct. It can also shine a light on misconduct that necessitates reporting to state or federal authorities, including the Federal Bureau of Investigation (FBI), the Federal Trade Commission (FTC), or other state agencies that may handle criminal violations in the corporate setting.
The corporate internal investigation process in Chattanooga can be long and complex. A diligent lawyer could guide your company through each step and provide valuable advice. Reach out to learn how an experienced legal firm in your community can help your case.
A corporate internal investigation is often initiated when an employee of a company raises concerns to upper management about behavior occurring at the lower end of the business. A notable example of this occurred when complaints from lower-level employees at Wells Fargo launched a corporate internal investigation that examined criminal conduct at the company and resulted in the discovery of widespread account fraud.
Another way that an internal investigation may begin is if a federal agency raises concerns about conduct within a business. For example, the Securities and Exchange Commission (SEC) may approach a company’s board of directors about troubling conduct within the company’s ranks. The SEC would then give the business the opportunity to conduct an internal investigation to evaluate the conduct and the best steps to internally address the malfeasance without the involvement of the agency. The corporation could propose a solution once the investigation is concluded and suggest its own resolution to the problematic conduct.
It could benefit the corporation to complete an internal investigation instead of a more public and potentially damaging investigation by outside authorities. A skilled attorney in the area could ensure that a corporate internal investigation proceeds efficiently and discretely.
One of the most important decisions early in the process of an internal investigation is for the board or upper management to decide which entity or entities will head the investigation. There are several parties who could lead an internal investigation. A corporation could utilize its own internal human resources department, its own internal compliance department, the general counsel could lead, or an outside law firm to perform the investigation.
Corporations often turn to outside counsel, as the findings of investigations led by semi-independent actors are considered more credible. Federal agencies may be more suspicious of investigations headed by internal actors who have significant ties to the company.
Outside counsel’s independence can mitigate that concern. Additionally, outside lawyers in the area who are conducting the investigation can shield the investigative memoranda, facts, and conclusions from involuntary disclosure to third parties, including the government.
Once a company’s management has chosen who will lead the investigation, investigators will look to the other important parties. These include the individuals who will be interviewed and anyone who has information that could help determine the outcome of the investigation. These witnesses could include the lowest-level employees up until the chief executive officer in the company.
An internal investigation will often be wide-reaching and review an expansive list of communications and internal documents. At the end of the process, the investigators will present their findings to the board of directors or applicable party. The board is tasked with making a decision regarding the investigation’s results while protecting their corporation and whether to involve third parties such as government agencies in the next steps in the investigation.
If a corporate internal investigation is necessary to determine if any illegal conduct has occurred within your company, outside legal counsel could help. An attorney could explain each stage of the corporate internal investigation process in Chattanooga and ensure that a comprehensive and accurate report is created. Call today to schedule a consultation and learn more about how to best proceed with an internal investigation.