Practice Areas & Industries: Sutherland Asbill & Brennan LLP


Internal Investigations Return to Practice Areas & Industries

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Sutherland is experienced in conducting internal investigations. We know how to resolve problems and interact with regulators and law enforcement.

Internal investigations are a vital tool to protect companies, helping to avoid or resolve possible actions by the government, employees, shareholders, whistleblowers or customers. While we know that internal investigations can be disruptive and expensive, we work efficiently and effectively to minimize those issues. Regulators have come to expect, if not demand, that companies conduct internal investigations if there are indications or allegations of wrongdoing, and often seek to have the results shared with the regulators. Sutherland attorneys have extensive knowledge of regulatory expectations and priorities, gained through decades of practice, as well as through their previous experience as senior counsel with the SEC, FINRA, or DOJ. We understand how regulators approach investigations and what hot issues regulators consider important.

We conduct investigations on behalf of companies, their boards of directors, their audit and special committees, and others. Recent matters include investigating alleged violations of the Securities Act, the Exchange Act, FINRA rules, and the Foreign Corrupt Practices Act (FCPA); financial reporting fraud; breaches of fiduciary duty; accounting practices; breaches of open government rules; and officer and director misconduct. We assist clients in related areas including criminal investigations, class action lawsuits, government civil actions and issues arising from regulatory examinations.

We analyze business practices for boards of directors or audit committees to assist these boards and committees in understanding the legal, regulatory and potential litigation issues the companies face and to guide them in establishing best practices and policies. Should our investigation uncover issues that must be reported, we assist our clients in reporting these issues to their regulators, while helping to preserve positive relationships with those regulators. We also help establish procedures to prevent future occurrences—often working in conjunction with our corporate and financial services regulatory colleagues.

Why Sutherland
Fast action.
Time is of the essence in an internal investigation. It is not uncommon for regulators to carry out their investigations at the same time a company is conducting an internal review, which means the clock is ticking for conclusion of a thorough investigation. Our team's size and experience means we hit the ground running. Our knowledge and understanding means that we can conduct an investigation efficiently and expeditiously.

We manage perceptions. An internal investigation itself runs the risk of being viewed as a “whitewash.” Our intimate familiarity with regulatory agencies allows us to reassure regulators that we conducted a proper and detailed investigation. Our track records as regulators and our reputations give us credibility.

We know the limitations of internal investigations. An internal investigation cannot always provide a business with a clean bill of health. Employee turnover, deficient record-keeping and uncooperative players are just a few of the obstacles to an exhaustive inquiry. We take these problems into account throughout the course of an investigation, overcoming them to the extent possible, but keeping interested parties including the board and the regulators abreast of such difficulties as appropriate.

Preventative action. The time to stop a problem is before it starts, and we are well-acquainted with best practices that can help clients avoid future allegations and investigations. To that end, we often provide proactive advice on topics such as record retention policies, responses to red (or even pink) flags and other procedural best practices.

We protect boards and directors. Sutherland analyzes a company’s business practices for boards of directors or audit committees to gather crucial information to satisfy their oversight roles. We help these boards and committees understand the legal issues the company faces.

We litigate when necessary. A core strength of our practice is our ability and willingness to litigate against regulators and private parties when reasonable solutions are not possible, and we provide clients a seamless transition from an investigation to defending alleged wrongdoing in arbitrations, state and federal courts and administrative proceedings.

Nuts and Bolts
Our broad experience, with accounting and financial service issues and as former regulators and in-house counsel, means that we bring an understanding of the industry, the business environment and the regulatory overlay to our investigations. We help clients navigate internal issues as well as respond to and interface with regulators, the media and lawmakers.

Who we represent:

  • Corporations
  • Boards of directors
  • Audit and special committees
  • Individuals (executives, directors and officers)

We have experience in the following areas:

  • Federal securities laws
  • Accounting and financial statement issues
  • Conduct of officers and directors (including alleged reserves accounting, options backdating, insider trading and Sarbanes-Oxley)
  • Government contracts and procurement
  • Corporate governance and ethics
  • Foreign Corrupt Practices Act (FCPA) (including parallel investigations by foreign governments)
  • Money-laundering and Anti-money laundering programs
  • Commercial bribery/kickbacks, fraud and theft
  • Environmental Protection Agency (EPA) criminal investigations
  • Congressional investigations
  • Federal tax laws

Take Action
At the first signal of an allegation of wrongdoing (whether it was made by a whistleblower, employee, customer or regulator), Sutherland’s Internal Investigations team is prepared to leap into action, providing swift and comprehensive results.

Selected Experience
Sutherland negotiates FCPA settlement with the SEC; DOJ declines to prosecute.
Sutherland conducted an internal investigation for our client and negotiated a favorable FCPA settlement with the SEC. The DOJ declined to prosecute.

Sutherland conducts complex accounting and trading investigation of software company.
Our attorneys are conducting an internal investigation for a client into allegations of breach of fiduciary duty, insider trading and improper revenue recognition by senior corporate officers and board members of the firm.

Sutherland handles internal investigation of whistle-blowing by former general counsel.
When a former general counsel had made a "noisy withdrawal," alleging illegial activities by our client's company and its chairman, Sutherland conducted an internal investigation. After receiving Sutherland’s report, the SEC and FINRA declined to further investigate the allegations.

Articles Authored by Lawyers at this office:

FINRA Announces Effective Date for Discovery Guide Amendments and Provides Insight on Current Initiatives and Trends in Securities Arbitration
Peter J. Anderson,Eric A. Arnold,Keith J. Barnett,Suzanne H. Bertolett,Bruce M. Bettigole, November 25, 2013
In its just-issued Regulatory Notice 13-40, the Financial Industry Regulatory Authority (FINRA) announced that the Discovery Guide Amendments recently approved by the U.S. Securities and Exchange Commission (SEC) will become effective December 2, 2013. In addition, FINRA Dispute Resolution...

IRS Issues Final Regulations Regarding Transfers of Derivative Contracts
Robert S. Chase,Daniel R.B. Nicholas,Amish M. Shah,Rich Sun, November 15, 2013
On November 5, 2013, the Internal Revenue Service (IRS) issued final regulations relating to the transfer or assignment of certain derivative contracts. The final regulations, which are provided as Treas. Reg. § 1.1001-4, address:

New CFTC Rules Provide Broad Enhancement of Protections for Customers of FCMs - But at a Cost
, November 15, 2013
On October 30, 2013, in a 3-1 vote, the Commodity Futures Trading Commission (CFTC or the Commission) approved final rules that significantly strengthen the protections afforded to customers of futures commission merchants (FCMs). “Enhancing Protections Afforded Customers and Customer Funds...

The U.S. Banking Agencies Propose a Liquidity Coverage Ratio: What it Means for End Users
, November 07, 2013
On October 24, 2013, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation proposed rules implementing the Basel III liquidity coverage ratio (LCR). The proposed LCR is more stringent than the international...

SEC Awards Whistleblower More Than $14 Million - Largest Award to Date
, October 07, 2013
In a press release issued on October 1, 2013, the U.S. Securities and Exchange Commission (SEC or Commission) announced its largest whistleblower award yet of $14 million. The recipient of the award is an individual whistleblower who reported information that led to a successful enforcement action...

The SEC Issues Formal Guidance Involving Financial Information Requirements for Certain Portfolio Companies of BDCs
Steven B. Boehm,Cynthia M. Krus,John J. Mahon,Harry S. Pangas, October 03, 2013
The U.S. Securities and Exchange Commission (SEC) Division of Investment Management recently published formal guidance (see link below) applying rules that require the inclusion of certain financial information on unconsolidated subsidiaries to portfolio companies of business development companies...