General Counsel’s Decision Tree for Internal Investigations for the Financial Services Industry

Financial services firms regularly encounter situations for which an internal investigation may be required to determine how the organization should respond. These range from industry-specific concerns, such as those related to potential non-compliance with applicable regulatory requirements, to more general concerns including Foreign Corrupt Practices Act (FCPA) compliance, data breaches, whistleblower complaints, risks introduced by the use of third parties and human resources issues. A robust compliance program can help avoid many issues, but not all issues can be foreseen or avoided. Accordingly, having an internal investigations playbook in place will facilitate the identification and remediation of issues and is an important complement to a well-designed and functioning compliance program. It also will facilitate the in-house team’s communications with outside counsel, who have a range of experience guiding companies through these precarious situations. In addition, adherence to a well-crafted playbook helps companies meet the expectations of enforcement authorities, such as the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Commodity Futures Trading Commission (CFTC), the Consumer Financial Protection Bureau (CFPB), the Office of the Comptroller of the Currency (OCC), the Federal Reserve and state attorneys general (as well as others), which can materially mitigate potential enforcement efforts and sanctions.