Internal Investigations and Keywords

investigations puzzle

Background

When conducting an internal investigation, you chiefly gather information in two ways:

  • Collecting and reviewing document; and,
  • Conducting employee/non-employee interviews.

Once the investigator identifies and collects documents and electronically stored information, he or she initiates the process of reviewing the data. However, reviewing millions of records may be impractical, so investigative search terms are developed and applied to uncover documents of interest.  I have found this process interesting because if the search terms generate too few results, there’s a risk that the investigation is inconclusive or produce flawed results.  On the other hand, search terms may generate large volumes of useless data, and reviewing these false positives wastes investigation time and is costly.

Investigative search terms are specific to each situation and are a primary tool used by the investigation team to identify possible relevant information in a data set. However, overly broad or poorly chosen terms or keywords can produce excessive and irrelevant results, or worse, miss the  “smoking gun” e-mail or document. Additionally, have you thought about the list of search terms or keywords being privileged or protected opinion work product in the context of an internal investigation?

Attorney-client privilege encourages full disclosure of information between a lawyer and his client by guarantying the inviolability of their confidential communications. The “work product of the attorney,” on the other hand, is accorded protection to preserve our adversary system of litigation by assuring a lawyer that his private files shall, except in unusual circumstances, remain free from the encroachments of opposing counsel.

Internal investigations that have been triaged as being privileged may, at some point, require the investigations team to explain their methodology to the outside independent auditors and government regulatory and enforcement agencies, like the U.S. Department of Justice (DOJ) or the U.S. Securities and Exchange Commission (SEC).

This fraud tip was provoked by an interesting article I read on Law360.  The authors state, “handing over internal investigation search term lists to outside auditors and government regulators and enforcers puts their client’s privilege arguments at risk.” 

The authors say that turning over search terms will not, in every case, trigger some blanket subject matter waiver (or even waiver of work-product protection for the actual document disclosed). Instead, the point is that the future is inherently tricky to predict, and that a potential downstream waiver is a legitimate concern that cannot merely be dismissed, lest you risk harming not only your client and the results of the investigation, but also your professional reputation.

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Closing and Practice Pointer

Before turning over any investigations findings, reports, or opinions, make sure to discuss the situation with the attorneys.

To help ensure outside independent auditors and government regulatory and enforcement agencies that your search terms are comprehensive and appropriate, consider, alternatively, providing verbal summaries of the subject areas covered by the search terms, or offering the outside independent auditors and government regulatory and enforcement agencies an opportunity to present their lists. You can then compare their lists of search terms against yours to verify whether anything needs to be added or modified.

While perhaps this approach is not ideal, such an approach could mitigate the risk of a subsequent privilege-waiver argument and the embarrassment of doing so.

I welcome your thoughts and comments.

Best,

Jonathan Pic

Jonathan T. Marks, CPA, CFE

 

Attribution:

Law360

Law Journal Library

 

 

 

 

 

 

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