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01 October 2015

The rise of Corporate Crime Investigations: The Fallout for Employees

2 mins

Gigantic fines have been imposed here and abroad on companies that have admitted regulatory breaches and criminal offences, and the UK now has US-style Deferred Prosecution Agreements for companies that confess early and hand over evidence to prosecutors.

Whichever way we turn, the law is moving to clamp down on corporate wrongdoing. However, as every corporate crime is committed by individual employees, the rise in corporate prosecutions can only mean one thing – more prosecutions of individuals.

Companies can significantly reduce fines and damage to a business by reaching an early settlement agreement with regulators and prosecutors. In order to have the opportunity to do so, they must  investigate promptly the full extent of suspected wrongdoing and hand over reports and evidence. This can sometimes mean that employees suspected of committing criminal offences at work are investigated and questioned by their employers without the benefit of safeguards that protect them and their right against self incrimination.

Alternatively, as a result of disclosures made by a company or whistleblower, the regulators or prosecutors may commence their own investigation during which they may interview witnesses and suspects and may involve the police to make arrests or search homes and work places.

An employee will have much to consider if they find they are to be questioned during a corporate crime investigation. Are they a witness? Or could they be a suspect? Will they keep their job and regulatory approvals? Will they unwittingly incriminate themselves or trigger regulatory action? How will  they balance a request for immediate co-operation with the need to have an eye on a possible prosecution in the future?

What is said during any investigation can be pivotal. It is vital to have the fullest possible disclosure of the matters that will be put in interview, and to know what possible regulatory breaches or criminal  offences may be under consideration. It is also essential to have sufficient opportunity to prepare to give a full and relevant account. Going into an interview insufficiently prepared,without access to records or unaware of the consequences of making certain admissions can come back to bite.

Investigations are stressful and difficult and the stakes can be very high, but with shrewd foresight and preparation the best can be made of a difficult situation and common pitfalls avoided.

This article was first published on The Canary Wharf Magazine.

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