Corporate Enforcement

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U.S. whistleblower protections broadly provide public and private sector employees with protection from retaliation for reporting potential concerns about misconduct. Companies that are ill-prepared to handle complaints internally not only face potential lawsuits from whistleblowers, but also open themselves up to substantial regulatory scrutiny and perhaps enforcement actions. …
Continue Reading Five Building Blocks for Effective Internal Controls to Comply with U.S. Whistleblower Protections

In late July 2019, U.S. federal and state regulators announced three headline‑grabbing data privacy and cybersecurity enforcement actions against Equifax and Facebook.  Although coverage of these cases has focused largely on their striking financial penalties, as important are the terms the settlements imposed on the companies’ operations as well as their officers, directors, and compliance professionals—and what they signal about potential future enforcement activity to come.
Continue Reading July 2019 Privacy and Cybersecurity Enforcement: Lessons for Management and Directors

While legal protections for whistleblowers in the United States were first adopted in the late 1970s for federal employees, statutory protections enacted in the last 20 years have substantially increased protection beyond the federal workforce to certain private-sector employees.  These protections create a number of potential issues for companies today, ranging from employee retaliation lawsuits to regulatory investigations. …
Continue Reading Whistleblowers: Who Are They and Why Should You Care?

The overall success of an investigation depends on the flow of communications between those overseeing an investigation, those conducting it and the company’s relevant stakeholders.  As such, it is necessary to identify responsibilities and define the structure of communications at the outset of the investigation…
Continue Reading Dealing with an Investigation: Communication

Effectively dealing with a crisis often requires disclosure to government authorities, shareholders, and other stakeholders, even when many facts remain unknown.  Companies must toe a delicate line when assessing when, to whom, and how much to disclose, especially in the absence of complete information. …
Continue Reading Disclosure and Notification Considerations When Managing a Crisis

Depending on the matter, data collection and management can be among the most daunting and logistically difficult tasks. Ensuring that the full relevant universe of data is being preserved and considered and that accurate recordkeeping is being performed is essential to managing large volumes of information and, in turn, facilitating fact-finding goals and risk assessment.
Continue Reading Dealing with an Investigation: Data Collection and Management

Last month, Representative Jim Himes (D-Conn) and his co-sponsors, Representatives Carolyn B. Maloney (D-NY) and Denny Heck (D-WA), introduced H.R. 2534:  The Insider Trading Prohibition Act.  Unlike its substantially similar predecessor, H.R. 1625, which was introduced by Representative Himes on March 25, 2015, H.R. 2534 has gained some momentum in the U.S. House of Representatives, having been unanimously approved by the Financial Services Committee in May 2019.  Although the bill is only at the preliminary stage, if the proposal eventually proceeds further in the process of becoming law, it will represent a potentially significant shift in and clarification of U.S. insider trading laws.
Continue Reading H.R. 2534: Insider Trading Prohibition Act – Congress Considers Enacting Changes to Insider Trading Law Under Section 10(b)

The beginning stages of an investigation are often the most critical.  At the outset of any investigation, information is often limited and events are unfolding quickly.  As a result, it is important to develop a clear and adaptable plan that is appropriately scoped, identifies the right team and sets forth the steps that will be taken as part of the investigation.  Having a written plan in place is crucial to making sure that all relevant stakeholders are on the same page about what activities the investigation will include.  It also ensures that the investigation is managed effectively and is guided by a clear set of objectives. …
Continue Reading Dealing with an Investigation: Planning Ahead

Choices made at the outset of a crisis can play a critical role in a company’s ability to maintain future privilege claims. Recent cases highlight the risks of:

1. Sharing privileged communications with third-party consultants;
2. Conducting witness interviews through non-lawyers; and
3. Discussing the crisis with a former employee.
Continue Reading Preserving Privilege in a Crisis

A company faced with a crisis needs to act quickly to assess and determine the scope of any potential liability in order to guide its first response and frame the forthcoming investigation.  Issues overlooked in the early phases of an investigation could prove very costly down the road, limiting options or potentially subjecting a company to greater penalties.
Continue Reading Assessing Risks and Potential Liability in Responding to a Crisis