Gov’t & Internal Investigations

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Overview

Businesses and individuals today confront a challenging enforcement environment, and with confidence turn to Kirkland & Ellis for sophisticated and cost-effective representation. Our Firm's experience is uniquely well-suited to handle the primary and collateral consequences of government investigations, whether it be pre-investigation prevention and mitigation, internal investigations or defense of a government investigation, or resolution through settlement or trial.

Today's difficult enforcement environment manifests itself in many ways. Federal and state enforcement authorities are using more aggressive techniques in their investigations, such as wiretaps, paid whistleblowers and sweeping document subpoenas. Investigations are also increasingly complex, as multiregulator investigations become more and more common. U.S. regulators participate in formal task forces or otherwise coordinate their investigations with their federal and state colleagues, often accompanied by parallel congressional hearings. Foreign regulators are also an increasing presence, which presents complex issues of foreign law and regulation, privilege, data protection, labor law, multiple representation and investigation protocol.

Business misconduct is also increasingly viewed as a proper subject of the criminal law. Conduct that historically was either not prosecuted, or addressed through civil enforcement only, is now the subject of investigations by criminal authorities. Sometimes strict liability statutes are available to government enforcement authorities. The consequences of criminal violations are grave; for companies, wrongdoing by even a small number of employees may result in criminal charges against an entire company, an outcome that, while uncommon, may well present enterprise-level risks for an institution. Criminal cases often trigger parallel state and federal civil suits, as well as derivative and false claims suits.

Settlements have also become more harsh. A settlement may now include admissions of wrongdoing, debarment and other business restrictions, as well as extended periods of post-settlement government monitoring and reporting. Admissions, in particular, can impose significant costs on a company, including the loss of defenses to class action and shareholder derivative litigation, denial of insurance coverage, competitive disability in bidding and RFP processes, and even the threat of follow-on parallel criminal charges.

Whether civil or criminal, enforcement investigations are increasingly expensive to resolve. Fines and penalties in the hundreds of millions and even billions of dollars are more and more common, often reflecting the excessive aggregation that can occur in multiregulator settlements. Adding to the sanctions are claims by whistleblowers operating under false claims acts or similar regimes.

Prevention and Mitigation

This difficult enforcement environment places a premium on prevention of wrongdoing. Not only is the cost of after-the-fact resolution increasing, but companies not charged with wrongdoing can suffer great harm simply through the revelation of an investigation, including reputational damage, stock price drops, and the filing of follow-on shareholder derivative and class action suits.

Kirkland lawyers are in the prevention business – the firm is well-versed in assessing legal and compliance risk in multiple programmatic areas and then devising internal compliance and control programs that allocate limited compliance resources in a prudent and cost-effective manner to the organization's highest risks. Kirkland's focus is on organizational structure, sensible policies, individual roles and responsibilities, supervisory controls, risk management, whistleblower and other early-detection controls, and compliance programs — all structured to allow for successful business performance.

With Kirkland's assistance, companies are better able to integrate risk-based, properly resourced compliance programs into their business operations. These programs increase competitiveness and profitability over time. They not only increase the odds of preventing violations in the first place, but they also position companies to legitimately assert that any putative misconduct was aberrational and thus should not properly be attributed to the corporate entity.

Investigations

If allegations of misconduct are made, Kirkland lawyers have the knowledge and experience to conduct a comprehensive internal investigation and to defend and represent the company if a more formal, adversarial government-led investigation is initiated. Kirkland is experienced in the many complex investigative issues that can arise, such as confidentiality and privilege, data protection and parallel civil litigation. Kirkland lawyers reach credible and well-founded conclusions, and work collaboratively with clients to consider options under various disclosure regulations and government contracting programs.

Kirkland lawyers have represented corporations, their boards of directors, and individual corporate leaders in numerous significant investigations and prosecutions. These matters have variously included allegations of:

  • Health Care Fraud
  • Environmental Crimes
  • Privacy Issues
  • Securities Fraud
  • Export/Import & OFAC
  • U.K. Bribery Act Violations
  • FCPA Violations
  • Bank Fraud
  • Mail & Tax Fraud
  • Government Contracting Fraud
  • Commercial Bribery
  • False Claims (qui tam) & Whistleblower Retaliation Violations
  • Money Laundering
  • Criminal Antitrust Violations
  • Financial & Accounting Fraud
  • Obstruction of Justice

Case Resolution

Kirkland is renowned for its experience in complex litigation, arbitration and white-collar defense. Overall, the Litigation Practice Group comprises of approximately 500 attorneys throughout the Firm's offices worldwide, which represents clients in trial and appellate courts at the federal and state levels, before administrative tribunals, and in arbitrations and other dispute resolution proceedings.

Kirkland's extensive trial experience is more valuable than ever in the current environment. The increasing cost of settling with the government, combined with the government's professed willingness to try more cases, requires that counsel prepare for the possibility of trial. Such preparation also provides an increased chance of achieving more successful and cost-efficient settlements through early identification of weaknesses in the government's legal theories, in the credibility of its witnesses, and in its narrative at trial. If the case cannot settle on appropriate terms, and thus proceeds to trial, Kirkland lawyers are second-to-none in their courtroom capabilities.

Lawyers in all of Kirkland's offices have tried cases, successfully to verdict or judgment, in virtually every business segment and substantive area including securities and shareholder matters, accountant liability, antitrust and competition matters, environmental matters, appellate class action, ERISA/benefits, insurance coverage, and international arbitration and ADR.

Finally, Kirkland's experience reflects both geographic and subject-matter depth. Kirkland currently represents numerous multinational entities in administrative, regulatory and criminal proceedings before the European Union and other international governing agencies. For instance, Kirkland has the largest Asian-based enforcement defense practice of any U.S. law firm, composed of a team of multilingual attorneys who are led by the only Mandarin-speaking former federal prosecutor resident in China. Kirkland also has one of the most senior former English enforcement prosecutors, resident in Kirkland's London office, who helps lead the Firm's international teams.

© 2014 Kirkland & Ellis LLP