Corporate Investigations

Manage risk and reputation by knowing the facts and findings

Corporate investigations can help identify fraud, misconduct, or other issues jeopardizing your business, thus it's important to manage risk better by knowing all the facts.

Fraud can be sophisticated, but it does not have to be. Because of its deceitful nature, it is almost always challenging to uncover. Launching effective corporate investigations increases your chances of winning in a competitive marketplace and actively manages your exposure to the considerable risk that stems from leaving issues unexamined.

Falcone International's services primarily focus on discrete and thorough corporate investigations. You need a trustworthy, impartial third party to get to the bottom of any issue. It becomes necessary to conduct an investigation when, for example, your firm is looking to verify the integrity of a business partner or find the facts about possible employee wrongdoing.

Falcone International can pursue a specific investigation from one area of interest to another. Corporate investigations can be local, worldwide, or regional in scope. You can rely on Falcone International investigators to be thorough and discrete as they are local, qualified experts with vast experience in fact-finding and intelligence gathering.

Falcone International can conduct your corporate investigations — how does it work?

A corporate investigation typically follows a systematic and structured process. The specific steps and procedures may vary depending on the nature of the investigation, the organization's policies, and the applicable laws and regulations.

• Planning and scoping: Initiate a preliminary investigation confirming wrongdoing while developing and planning the exhaustive investigation. Also, in this stage, it is important to identify and evaluate problems before they hurt your business and avoid lawsuits. 
• Prioritization and launch: Determine the objectives of the investigation and mounting it by activating all necessary resources to conduct an effective and efficient investigation
• Gathering information: Evidence gathering and recording while identifying responsible parties
• Conducting interviews: Interviews are conducted with individuals who may have knowledge or involvement in the matter under investigation. Interviews are typically conducted in a structured and confidential manner. Interviewees may include employees, supervisors, witnesses, and individuals who reported the alleged misconduct. Interview notes or transcripts are documented for reference and analysis.
• Document review and analysis: Relevant documents, such as contracts, financial records, emails, memos, and other forms of communication, are reviewed and analyzed. This helps establish a timeline, identify patterns, and gather evidence to support or refute the allegations. Document retention policies are followed to ensure preservation of relevant evidence.
• Analyzing financial data: If financial improprieties or fraud are suspected, forensic accountants may be involved to analyze financial data, transactions, and records. This helps uncover discrepancies, irregularities, or evidence of financial misconduct.
• Assessing legal and regulatory compliance: The investigation evaluates whether the organization's actions and practices comply with applicable laws, regulations, and internal policies. This may involve working closely with legal counsel or compliance officers to assess the organization's adherence to legal requirements.
• Reporting and communication: The report sets out findings, conclusions and recommended corrective action, along with the methodology, the key evidence, and what remains unresolved. Where senior management, counsel or a regulator needs to see it, we help present it — each audience needs a different level of detail from the same facts.
• Taking appropriate actions: Based on the investigation's findings, the organization takes appropriate actions to address the issues identified. This may involve disciplinary measures, policy changes, process improvements, restitution, legal proceedings, or other actions deemed necessary to prevent further misconduct and ensure compliance.

What triggers corporate investigations?

A corporate investigation can be triggered by various factors, and the specific triggers may vary depending on the nature of the organization, industry, and jurisdiction. Sometimes a trigger can also be defined in a financial policy or other policies that a company might maintain.

Here are some examples of common triggers for corporate investigations:

• Whistleblowing from employee or business partners that report an irregularity or breach of policies or laws
• Facts discovered in due diligence, which warrant further investigation and that have been identified as red flags by either party of the transaction
• External investigation, such a visit or communication from a supervisory body or regulator, including a 'dawn raid' by authorities
• Findings or an audit, performed by an internal or external team, which has found irregularities that warrant further scrutiny.

It's important to note that triggers for corporate investigations may vary depending on the specific circumstances and legal requirements applicable to each organization. Companies often have their own policies and procedures in place to determine when and how investigations should be conducted based on their internal protocols and external obligations.

Global corporate investigations need global resources. A well-defined, well-executed corporate investigation can also safeguard a company's reputation. In addition, corporate investigations can reveal fraud, quantify loss, and identify the offenders.

Why should you launch a corporate investigation?

A company's reputation could suffer irreparable harm without an immediate and thorough investigation. Launching a corporate investigation can provide numerous benefits, including safeguarding your company's reputation, protecting financial interests, complying with legal and regulatory requirements, and preventing future misconduct. By initiating an investigation, you demonstrate your commitment to maintaining a strong ethical framework and protecting the well-being of your business and stakeholders.

• Safeguard your company's reputation, operations, and financial standing.
• Thoroughly examine internal issues such as fraud, employee theft, or wrongdoing that can be costly to the business's bottom line and damaging to its reputation.
• Obtain valuable information to be used as part of a legal strategy in domestic or foreign judicial proceedings.
• Signal cooperation toward regulators, enforcement authorities, including prosecutors, or in response to subpoenas from entities like a grand jury.
• Act on an allegation early, while the evidence still exists and the response is still yours to choose.
• Uncover the truth, identify responsible parties, and take appropriate actions to mitigate the impact and prevent recurrence of fraudulent or unethical behavior.
• Gather evidence properly, so that it holds up if the matter becomes contested.
• Establish credibility with regulators and enforcement authorities by investigating before you are asked to, and by being willing to cooperate fully.
• Enter any legal or regulatory process knowing what happened, rather than learning it at the same time as everyone else.
• Demonstrate internally that conduct standards apply regardless of seniority, which is the only form in which anyone believes them.

Use an outside team where independence matters — which is most cases involving senior people, and every case where the findings may need to be shown to someone else. 

Let Falcone International assist you in safeguarding the operations, reputation, and financial standing of your business.

How the engagement runs

The order matters more here than anywhere else, because evidence degrades and people talk.

Straight answers

Should we investigate internally first?
Usually not beyond establishing that there is something to look at. A half-scoped internal look can surface enough to establish knowledge without defining the extent, which is the worst of both positions. Involve counsel before the internal email chain has been written.

Will people know we are investigating?
Eventually, and how that lands depends on sequencing. Evidence preservation comes first for exactly this reason.

What if it involves a senior person?
That is the most common reason an outside team is brought in, and the case for independence is strongest there. An internal investigation into someone who outranks the investigator does not produce a report anyone will rely on.

Do we have to report what we find?
Sometimes, depending on jurisdiction, sector and what was found. That is a question for counsel, and how the finding is recorded affects both privilege and the disclosure position — which is why we work to counsel’s instruction throughout.

What happens to the person who reported it?
Handle that deliberately. If raising a concern visibly costs somebody, you have trained everyone else not to. Our executive vetting case study covers the related problem of an internally referred candidate nobody wanted to question.