Page 34 - American College of Trial Lawyers Federal Criminal Procedure Committee 2020 Update: Recommended Practices for Companies and Their Counsel in Conducting Internal Investigations

E. FCPA and Other Bribery Issues

When carrying out internal investigations that involve the Foreign Corrupt Practices
Act (FCPA) or other bribery issues, multinational employers may find themselves investigating
alleged wrongdoing in more than one country. In such cases, practitioners should be aware that in
2018 the Justice Department adjusted its approach to holding individuals and corporations responsible
for improper conduct under the FCPA.
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VII. Recommendations

A company should take steps to consider an internal investigation when significant corporate
malfeasance has been alleged or when an independent auditor gives notice that it suspects the
possibility of illegal corporate activity. In reaching a decision on whether or to what extent an
internal investigation is in the best interests of the company and its shareholders, the Board of
Directors, audit committee, or special committee should – in consultation with disinterested in-house
or outside counsel – weigh and consider published prosecutorial and regulatory policies, related
cases and dispositions, DOJ and/or SEC guidance, and the impact and costs to the company of an
investigation and of any potential follow-on litigation. A Board, an audit committee, or a special
committee may, in select circumstances, after consultation with counsel, conclude that it is not in the
best interests of the company to conduct an internal investigation, or disclose to, or cooperate with,
the government if an investigation is undertaken.

When the alleged or suspected conduct implicates high-level, sensitive or serious misconduct,
or when the company itself is the focal point of a government inquiry, management, usually including
the general counsel’s office, should not be, and should not be perceived to be, in charge of or
otherwise exert any material influence over the internal investigation.

A committee of the Board of Directors consisting of independent members of the Board
(“Independent Committee”) should be delegated the task by the Board of overseeing the internal
investigation, including retaining counsel to conduct the investigation, when significant corporate
malfeasance has been alleged or when an independent auditor gives notice that it suspects the
possibility of illegal corporate activity. The audit committee often constitutes the Independent
Committee.

The goal of the Independent Committee should be to seek to determine the truth of the
underlying allegations, to safeguard and act in the best interests of the shareholders, and to prevent
the internal investigation from impairing the reputations of employees, officers, and directors of the
company not found to have engaged in wrongdoing.

The Board of Directors should pass a resolution broadly authorizing the Independent
Committee to retain counsel and counsel’s experts and consultants, conduct an investigation, and
report its ultimate findings to the Board.

106 See supra, note 14.

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