When the Corporation Investigates Itself

Research Handbook of Corporate Crime and Financial Misdealing, 2018 Forthcoming

Brooklyn Law School, Legal Studies Paper No. 553

32 Pages Posted: 20 Mar 2018  

Miriam H. Baer

Brooklyn Law School

Date Written: March 19, 2018

Abstract

The internal corporate investigation has become an integral component of the corporate compliance function. Corporations invest considerable resources in identifying and explaining wrongdoing, and government prosecutors and regulators rely heavily on these information-generating activities.

This Chapter argues that the corporate investigation’s greatest challenges stem from the familiar problem of detection avoidance. As employees take steps to conceal their misbehavior, corporate actors must navigate a difficult relationship between government enforcers on the one hand, and corporate employees on the other. Mediating these relationships would be difficult enough under any circumstance, but a vexatious deficiency of trust between corporate actors and government enforcers causes corporate actors to cling ever more intently to legal doctrines such as the corporate attorney-client privilege, while simultaneously conducting more intensive, intrusive and expensive investigations. The Chapter concludes by noting two developments: the Department of Justice’s latest attempt to secure cooperation from corporate defendants in identifying culpable employees (the so-called “Yates Memo”), and the increasing emphasis on workplace privacy. These two developments will place even greater pressure on the corporate investigator as she attempts to reassure the corporation’s employees and regulators that each side can in fact trust the corporation to investigate itself thoroughly yet fairly.

Keywords: Corporate crime, compliance, internal investigations, deterrence, detection, signaling, attorney-client privilege, privacy, deferred prosecution agreements, respondeat superior

JEL Classification: K14

Suggested Citation

Baer, Miriam H., When the Corporation Investigates Itself (March 19, 2018). Research Handbook of Corporate Crime and Financial Misdealing, 2018 Forthcoming; Brooklyn Law School, Legal Studies Paper No. 553. Available at SSRN: https://ssrn.com/abstract=3143725

Miriam H. Baer (Contact Author)

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States

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