When Compliance Programs Fail: Best Practices for Investigating Potential Wrongdoing and Managing the Fallout

Davit Akman of Gowlings LLP and a panel of in-house counsel used a refreshing format for their ACC presentation “When Compliance Programs Fail: Best Practices for Investigating Potential Wrongdoing and Managing the Fallout”.

They launched “Millionaire Lawyer”, complete with faux dollar prizes, “lifelines”, contestants and audience participation. Along with Akman, the Panelists were Andrea Horton, Senior Counsel in the General Counsel Group at the Royal Bank of Canada; William Mordan, Senior VP and General Counsel at Reckitt Benckiser Group; and Khaled Rabbani, General Counsel, North America and Global Food of Mars, Incorporated.

It was a novel and very effective forum in which to review hypothetical, yet quite realistic, potential situations of internal, corporate wrongdoing. For example, several audience members sounded surprised with the Panel’s answer to the following question put to a contestant:

“Your company is concerned that certain employees may have engaged in bid-rigging in the US with one or more of its competitors. An internal investigation is underway. What other steps should be taken contemporaneously with that investigation?”

The optimal answer (from among four choices) according to the Panel was:

“Consider applying for leniency from the DOJ”.

Akman explains: “Given the severe criminal sanctions under US antitrust law, credible allegations of bid-rigging should trigger a race for leniency.  Upon discovery of potential bid-rigging or other per se anti-competitive conduct, companies should ask as soon as possible for a ‘marker’ from the DOJ Antitrust Division, the first step in obtaining leniency and possible amnesty for the company and its executives. The leniency process in the U.S (like the immunity program in Canada) is ‘winner-take-all’ in the sense that only the first to self-report gets full immunity or amnesty from criminal prosecution. For those who self-report thereafter, only leniency in the form of reduced criminal sanctions (which may include jail time for executives) is available. If it’s not clear that there’s been a violation, it’s best to err on the side of caution and put a ‘marker’ in any way. If the initial concerns aren’t ultimately borne out by your internal investigation, the marker can be withdrawn”.

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