Work in tandem: why self-reporting requires companies to manage a deft balancing act
Self-reporting requires companies to manage a deft balancing act, says Gibson Dunn's Patrick Doris...
October 26, 2011 at 07:03 PM
3 minute read
Self-reporting requires companies to manage a deft balancing act, says Gibson Dunn's Patrick Doris
International co-operation between white-collar criminal enforcement agencies is an increasing feature of the regulation of global corporate activity. In mid-2010, Lanny Breuer (pictured), assistant attorney-general of the criminal division of the US Department of Justice, said: "We are actively working with our foreign counterparts in various areas to ensure that country borders won't limit our ability to fight fraud… US-EU agreements on mutual legal assistance and extradition… offer significant new tools that will streamline cross-border investigations and allow for even greater co-operation with our counterparts abroad."
In the intervening 18 months, cross-border investigative co-operation has intensified, most notably among anti-corruption authorities and financial regulators. This trend, spanning much of the field of corporate criminal enforcement, can only benefit the business community. Exposing investigators in jurisdictions building enforcement capacity to more experienced colleagues overseas raises enforcement standards and fosters compliance.
Similarly, for a company considering pursuing, or that has already embarked upon, a strategy of co-operation, inter-agency collaboration offers great benefits on investigative timing, disclosure logistics and, potentially, co-ordinated resolution. Pointing to the case of Siemens, Breuer emphasised the benefits that may flow from "truly extraordinary co-operation" in cases with international dimensions, citing a bottom line 67%-84% reduction in that case in fines that might otherwise have been imposed. Yet, too often, patchy co-operation across a group of investigative authorities and variations in applicable laws and investigative timetables lead to stresses emerging in a co-operating company's relationship with investigators.
Self-report in haste, repent at leisure
Where collusive conduct is uncovered, the race to the regulator inevitably requires alacrity in self-reporting. Beyond antitrust, however, the calculation may change, particularly where cross-border co-operation with multiple agencies may be required. In that context, the company should give thought at the outset to the available means of moving forward, with the authorities broadly in step in terms of access to evidence and witnesses. While such a strategy can be departed from later, that should happen by design, and in consultation with the authorities, rather than being driven by variations in applicable legal regimes and the specific priorities of individual agencies.
Attention should also be paid to the feasibility and attractiveness of multijurisdictional co-operation. Even otherwise broadly similar self-reporting regimes may contain important differences on close scrutiny – by way of example, while some antitrust leniency regimes deny immunity to "instigators", others target "enforcers". The geographical and subject-matter scope of the conduct subject to investigation should be assessed in determining a co-operation strategy. A client encouraged to seek antitrust immunity may be dismayed to find itself rail-roaded into collaboration with a range of sectoral or other prosecutorial agencies, too.
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