Conducting Internal Investigations

Conducting an internal investigation can be a difficult task. An investigation into employee wrongdoing can be costly, disruptive and time-consuming, and can also lead to a variety of legal problems and other unexpected complications if it is not conducted with the utmost care and confidentiality. However, a well-run internal investigation can enhance a company’s overall well-being and can help detect the source of lost funds, identify responsible parties and recover losses. It can also provide a defense to legal charges by terminated or disgruntled employees. But perhaps most important, an internal investigation will signal to other employees that the company will not tolerate fraud.

Conducting Internal Investigations will prepare you for every step of an internal investigation into potential fraud, from receiving the initial allegation to testifying as a witness. In this course, you will learn how to lead an internal investigation with accuracy and confidence by gaining knowledge about various topics, such as relevant legal aspects of internal investigations, using computers in an investigation, collecting and analyzing internal and external information, interviewing witnesses and writing reports.

Below are 5 important steps on how to create internal investigations:

  1. Issue a Hold

Any number of events may launch an internal investigation at a company: a subpoena, a search warrant or a notice of investigation from federal prosecutors; a phone call from a regulatory agency; an employee complaint; a shareholder demand letter; concerns from auditors; or even a media report that makes management aware of a potential legal issue. Whatever the driver may be, a first step in carrying out an investigation is to ensure any potentially relevant documents are preserved by issuing a litigation hold that suspends any routine document-destruction practices and makes clear to all relevant parties that they must preserve documents or communications related to the investigation.

  1. Define the Scope

Simultaneously, the client should begin working with outside counsel to determine the scope of the investigation going forward.

Sometimes these issues can get away from you if, at the outset, you haven’t identified what needle you’re going to look for in the haystack

If a subpoena triggered the investigation, it’s necessary to clarify what prosecutors are seeking. In some instances, the subpoena might be specific enough to understand the general allegations. But often, prosecutors cast wide nets. If the investigation is the result of an employee tip or another internal trigger, it’s just as important to define the scope, although the conversation will be different. In either case, it’s vital to be as specific as possible about where the probe is going at its outset.

Circumstances and facts may present themselves over the course of the investigation that may alter your scope, but you want to make sure you’re ready at the beginning and that everybody understands where you’re beginning.

  1. Focus the Investigation

The most common pitfall in internal investigations is doing too much and lacking focus. The other extreme is another misstep: If prosecutors don’t think the investigation is thorough enough, the company might not get any credit for it. Strike the right balance and have a dialogue with the people to whom you’re reporting the results of the investigation.

It’s impossible to define the scope without considering the client (the board, management or a special committee) and the ultimate destination of the final report. Is it an

  1. Build a Team

A strong team experienced in internal and white-collar investigations can lend credibility to a company’s findings.

You need people who are vocal and prepared to disagree because it can take a lot of intellectual back and forth to get to conclusions, It helps navigate what can be a mountain of information to get to more well-reasoned ultimate conclusions.

  1. Collect and Review Documents

Once the investigation team lays the groundwork and deals with the most pressing initial issues, the meat of the investigation begins. The investigation team identifies search terms and custodians, and begins document production and review. It’s usually the costliest part of an internal investigation, but the assistance of the government agency or prosecutor can help make the process more manageable.



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