Corporate Investigations: Understanding the Concept
Corporate investigations, though a relatively new concept in Romania, are increasingly becoming common among large companies operating in the country. The purpose of corporate investigations is to enable management to identify any irregularities that have occurred within the company or in relation to the company’s business. These investigations are different from formal investigations conducted by national or EU authorities, as the two types of investigations have different functions and purposes.
Reasons for Conducting Corporate Investigations
Corporate investigations are usually conducted as a result of management’s need to understand and react appropriately to situations such as suspected breaches of the law (corruption, money laundering, fraud, among others), or issues related to certain official procedures carried out by the authorities. In some cases, the lack of an investigation may itself constitute an irregularity or may worsen the liability of the legal person or management, especially where the law obliges legal entities to conduct such investigations.
The Specifics of Corporate Investigations in Romania
In Romania, there are many legal and technical difficulties specific to the process of understanding what actually happened in relation to an irregularity, in order to find out who is responsible, how the deeds were committed, what the consequences are, and what the legal path to follow so as to limit the consequences and recover any damages. Each jurisdiction has specific limitations and rules that guide corporate investigations. In Romania, for instance, there are rules and limitations concerning evidence and how it can be obtained within corporate investigations. These limitations include obtaining and handling electronic records or documents, gaining access to employees’ laptops and office emails, or interviewing employees. Expert legal assistance is, therefore, needed to avoid interference with active legal obligations that could affect the viability of the investigation and whose violation may entail negative consequences.
Choosing the Investigation Team
The success of a corporate investigation depends on putting together the right team. Corporate investigations usually require a joint effort of several specialists with knowledge in different fields, depending on the industry in which the targeted company operates. The appropriate internal and external team needs to be set up, which may include a legal department and/or lawyers, IT and/or HR staff, forensic specialists, and people who have the necessary industry and organizational knowledge to facilitate an understanding of how fraud was committed within the company. The involvement of Legal Counsel in internal investigations is crucial, at least for compliance with the legal requirements of the investigation. Additionally, choosing a lawyer for leading or supervising an investigation can also be beneficial from the perspective of confidentiality that the law offers to such an investigation, since in Romania and at European level, professional secrecy between lawyer and client is protected by law.
- Corporate investigations are necessary and particularly useful tools that allow management to react appropriately to suspected breaches of the law or related issues.
- Conducting corporate investigations require a joint effort of several specialists with knowledge in different fields, and the right team must be put together to ensure the effectiveness of the investigation.
- Expert legal assistance is also required to avoid interference with active legal obligations that could affect the viability of the investigation and whose violation may entail negative consequences.
Personal note of the author: Benefits of being a Criminal Defense Lawyer and the first practicing lawyer to earn the Certified Fraud Examiner credential.
As someone who is both a criminal defense lawyer and a Certified Fraud Examiner, I have been able to consolidate the knowledge I have gained over the years in criminal law with a specialization in White-Collar Crimes, particularly in preventing, identifying, and understanding economic crimes. At the same time, my CFE accreditation has also contributed to diversifying my caseload by increasing my involvement in cases of corporate criminal liability.
Having a CFE accreditation confirms my expertise in the field of corporate investigations, from the beginning of an investigation to its conclusion. This certification complements my skills as a criminal lawyer who helps multinational companies investigate complex internal fraud cases. I also work with multidisciplinary teams of lawyers at act Botezatu Estrade Partners to manage corporate investigations that cover several practice areas.
While we engage in various criminal prevention activities, such as reviewing AML/anti-fraud/anti-corruption compliance policies and conducting necessary training with employees and management, corporate investigations play a critical role. These investigations have a deterrent effect and even contribute to criminal prevention by creating certainty within companies that any suspicions of irregularities will be investigated, and those found responsible will be reported to the judicial authorities and sanctioned accordingly.
Corporate investigations conducted by a specialized lawyer with experience in criminal defense and fraud examination can be an invaluable tool for companies to detect and prevent financial crimes.