November/December 2008 / Features
Steps to Take When Your Business is Victimized
This article emphasizes the need to have a coherent plan in place when a business is victimized by white collar fraud. The issue needs to be confronted without delay, the author says. The first step is having the right mind set. Be aware that the experience is widely-shared, and that it constitutes an opportunity to demonstrate strength.
The situation should be reviewed in a privileged setting. If consultations are solely with in-house counsel, a question often arises: Is the thrust of the discussions business issues, where the privilege might be inapplicable, or is it legal matters? If the line between business and legal considerations becomes blurred, an adversary might later claim that the conversations with in-house counsel were not privileged.
The crisis team, in addition to counsel, should include officials responsible for compliance, finance, human resources, marketing and communications, and information technology. Consider whether outside experts need to be retained. Regardless of the team’s composition, identify who among the officers and board need to be alerted.
An internal investigation must be considered. A major concern should be whether the matter is simply an isolated incident or reflective of a systemic corporate problem. To preserve privilege, counsel should be closely involved in establishing the protocols for the inquiry and the manner in which its findings are prepared.