Corporate investigations are serious matters that can hurt companies through legal action, financial fallout and reputational damage. If an issue goes unaddressed, authorities can take significant action. There are several warning signs and firms to help businesses handle the investigative process.
Understanding Corporate Investigations
A corporate investigation occurs after someone files a complaint, a federal subpoena or a similar action against a business. The investigation ensures the company complies with all applicable state and federal regulations. A business conducts an internal investigation to find the source of the issue and address it before it escalates.
What Warning Signs Call for a Corporate Investigation?
Five primary warning signs indicate a company may require a corporate investigation.
Financial Discrepancies
If there is an issue with finances, a corporate investigation may be warranted. Issues of embezzlement or financial fraud are significant problems. If the company notices any accounting errors, intentional recordings of fake or misleading revenue, or any other manipulations of financial statements, they should be investigated. A smaller-scale example is an employee misusing a company credit card. Depending on what they bought, the matter could become a large-scale issue.
Data Breaches
Various data breaches require a corporate investigation. If someone steals confidential company information, it should be investigated. A notable example of this is an employee resigning abruptly without notice and then immediately joining a business rival. They could be revealing secret company information. If someone accesses or uses personal information without the business’s consent, an investigation is required.
Employee Issues
Multiple employee issues call for a corporate investigation, including workplace violence, negligent behavior, company policy violations, or suspected theft or fraud. Instances like these can create a toxic work environment and negatively impact the company if left unchecked.
Unethical Rival Surveillance
There are ethical ways for professionals to surveil a rival business and collect data to improve their own company. However, if a corporation uses unethical or prohibited methods to spy on a rival, an investigation should be conducted.
Noncompliance with the Law
Corporations operate within a complex framework of federal, state and local laws. An investigation can be triggered when a government agency suspects a company is failing to meet its legal obligations. Legal compliance issues could fall under categories like financial and securities violations, antitrust and fair competition, environmental regulations, workplace safety, or health care fraud. The service of a subpoena, a Civil Investigative Demand or an informal visit from federal agents are all indicators that a company is under scrutiny for a compliance issue.
When investigations cross state lines, companies may need to domesticate and serve records demands in New York; understanding the New York subpoena service process under the UIDDA reduces risk of delay or motions to quash.
Who Are the Best Corporate Investigation Firms?
Because corporate investigations are serious matters involving a company’s inner workings, it is crucial to select the right firm to conduct the investigation.
Guidepost
Guidepost is the best firm for conducting corporate investigations. Its team has experience in federal, state and local law enforcement and consists of attorneys, forensic accountants, research analysts and more. It uses a phased approach to tackle investigations. The first phase is public records research, followed by comprehensive research, analysis, verifications and then field investigations.
Its primary goal is to protect the company’s reputation by handling any information uncovered with discretion and sensitivity. Guidepost has conducted over 100 financial investigations, including issues of embezzlement, billing scams, inventory theft, and other forms of fraud or misconduct. Its team of lawyers can distinguish between irrelevant and crucial data to maximize the efficiency of the investigation and remain cost-effective for the client’s budget.
Key Features:
- Experienced team
- Phased approach
- Cost-effective
2. Covington & Burling LLP
Covington & Burling LLP handles complex and high-stakes disputes. Its team has experience in many different disciplines, providing a diverse and informed perspective for investigations. If national or local government agencies are getting aggressive in their approach, Covington & Burling LLP will defend the company. It puts the corporation in the best situation to win by developing cases early, focusing on the discovery of key issues and taking the case to trial when necessary.
Its global outreach to other companies can help uncover creative ways to end cases as early as possible. Its broader resources include e-discovery, technology for managing information and preparing trial exhibits, and collaboration with firms across the area.
Key Features:
- Complex, high-stakes dispute handling
- Early case development
- Global outreach
3. WilmerHale
WilmerHale has significant experience and capabilities to counsel companies. It has handled internal, governmental and cross-border investigations. Its clients include Fortune 500 companies, corporate executives and public officials. WilmerHale’s lawyers have held high-level government positions, possess the necessary subject matter expertise and are dedicated to helping clients achieve their business objectives.
The company also has global outreach to other firms. In terms of internal investigations, it has examined whistleblower complaints and conducted reviews involving governance, ethics, anti-bribery, corruption, exportation and importation controls, and other violations.
Key Features:
- Internal, government and cross-border investigations
- Diverse clients
- Lawyers with experience in high government positions
4. Latham & Watkins LLP
Latham & Watkins LLP offers global representation for high-stakes investigations. Many of its experienced defense lawyers were once senior prosecutors and various government officials. The company has helped corporations, financial institutions and boards of directors understand and resolve high-profile investigations.
It integrates its own team with the client’s to create a strategy that balances relevant legal, operational and reputational considerations. Some cases the firm has covered include financial fraud, market manipulation, bribery, corruption, cryptocurrency, sanctions and health care. It also helps companies proactively prevent future misconduct.
Key Features:
- Global representation
- Experienced team of defense lawyers
- A strategy that integrates with the client’s team
5. Sidley Austin LLP
Sidley Austin LLP has experience with both major United States corporations and companies abroad. Its team has investigated issues involving health care fraud, insider trading, market manipulation, accounting fraud, environmental violations and other matters of a similar nature.
It advises companies on corporate governance issues and compliance programs. Its team comprises lawyers with experience in almost every substantive area of law.
Key Features:
- Success with major U.S. corporations
- Experience in investigating a wide array of issues
- Expert lawyers in every facet of the law
Methodology
This list was compiled based on in-depth research into law firms specialising in corporate investigations. The evaluation process involved reviewing legal industry rankings, analysing high-profile case outcomes reported in the media and examining the firms’ own published materials.
A primary factor in the selection process was the depth of the legal team’s experience in related sectors, like government, as firsthand experience is invaluable in navigating inquiries. The breadth of each company’s expertise across a range of critical issues, including financial fraud, cross-border corruption, data privacy and complex regulatory compliance, was also evaluated.
Deciding When to Initiate an Investigation
Corporate investigations are daunting for companies with internal issues or reports filed against them. Knowing the warning signs and choosing the right firm can go a long way in equipping a business with the ability to identify and limit the negative impact of an investigation.
