Page 13 - American College of Trial Lawyers Federal Criminal Procedure Committee 2020 Update: Recommended Practices for Companies and Their Counsel in Conducting Internal Investigations

(7) The extent of cooperation with the Commission and other law
enforcement agencies. 27

In a speech in October 2018, Steven Peikin, Co-Director of the SEC’s
Division of Enforcement, affirmed the continuing importance of the cooperation factors identified in
the Seaboard Report, including “the nature of the remedial steps taken by the company, its own self-
reporting and self-policing efforts, and the extent of its cooperation with the Commission and other
law enforcement agencies.” 28

Despite the DOJ memoranda and SEC guidance discussed above, in most cases
the precise benefits of the company’s cooperation, if any, are not ascertainable at the outset of an
investigation. Indeed, many companies that have cooperated with the government have received stiff
financial penalties, albeit perhaps lower than if no cooperation had been proffered. In 2006, then-
29
Assistant Attorney General Alice Fisher, in comments on DOJ policy still applicable today, extolled
the upside of corporate cooperation:

“It … would not be in the best interests of law enforcement to make
promises about lenient treatment in cases where the magnitude,
duration, or high-level management involvement in the disclosed
conduct may warrant a guilty plea and a significant penalty. But
what I can say is that there is always a benefit to corporate
cooperation, including voluntary disclosure . . . [I]f you are doing
the things you should be doing – whether it is self-policing, self-
reporting, conducting proactive risk assessments, improving your
controls and procedures, training on the FCPA, or cooperating with
an investigation after it starts – you will get a benefit. It may not
mean that you or your client will get a complete pass, but you will
get a real, tangible benefit.”
30

27 Id.
28 Remedies and Relief in SEC Enforcement Actions, available online at https://www.sec.gov/news/speech/speech-peikin-100318.
29 For discussions regarding the benefits and potential pitfalls of cooperation, see Neal Marder, Peter Altman, and Josh Rubin, Four
Steps of Cooperation During an SEC Investigation, Corporate Counsel, Dec. 13, 2016, available online at https://www.akingump.com/
images/content/5/3/v2/53581/016121603-Akin.pdf. See also Junaid Zubairi and Brooke Conner, Is SEC Cooperation Credit Worthwhile?,
Law360, Aug. 30, 2016, available online at https://www.law360.com/articles/833392. The cost for not cooperating can be severe. There is
no better example of the extreme risks a company can face for rejecting the path of cooperation and fighting criminal charges than Enron’s
former Big Five accounting firm Arthur Andersen. Arthur Andersen in 2002 voluntarily surrendered its licenses to serve as CPAs in the US
after it was found guilty in a trial over its auditing of Enron. See “Andersen Surrenders Licenses to Practice Accounting in U.S.,” The Wall
Street Journal, Sept. 2, 2002, available online at https://www.wsj.com/articles/SB1030845411754123835. The Supreme Court’s reversal
of the conviction in 2005 was too late to save the accounting practice. See Arthur Andersen LLP v. United States, 544 U.S. 696, 125 S. Ct.
2129 (2005); “Arthur Andersen Goes Out of Business,” ABC News, Dec. 8, 2009, available online at https://abcnews.go.com/Business/
Decade/arthur-andersen-business/story?id=9279255.
30 Prepared Remarks of Alice S. Fisher at the ABA National Institute on the Foreign Corrupt Practices Act, Oct. 16, 2006, available
online at https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2010/04/11/10-16-06AAGFCPASpeech.pdf.

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