CCCP Government Investigation Response 4 — Questions and Answers
Question 1: Under the DOJ's Corporate Enforcement Policy, what is required for a company to receive the maximum cooperation credit?
- The company must pay all fines within 30 days of the investigation's conclusion
- The company must voluntarily disclose, fully cooperate, remediate, and disgorge all profits (Correct answer)
- The company must waive attorney-client privilege over all internal investigation materials
- The company must terminate all employees implicated in the misconduct within 60 days
Correct answer: The company must voluntarily disclose, fully cooperate, remediate, and disgorge all profits
To receive maximum cooperation credit, the DOJ requires voluntary self-disclosure, full cooperation including providing all facts about individuals involved, timely remediation, and disgorgement of profits.
Question 2: What does 'obstruction of justice' in a corporate investigation context most commonly involve?
- Failing to appoint an independent compliance monitor as required by a consent decree
- Destroying documents, coaching witnesses, or impeding government access to evidence (Correct answer)
- Refusing to voluntarily disclose potential violations before they are discovered
- Asserting attorney-client privilege over internal investigation findings
Correct answer: Destroying documents, coaching witnesses, or impeding government access to evidence
Obstruction of justice typically involves actions like document destruction, witness tampering, or any effort to impede the government's ability to gather evidence in an investigation.
Question 3: When should a company's compliance team involve outside legal counsel during a government investigation?
- Only after the government has formally charged the company with a criminal offense
- As early as possible, ideally upon receipt of any government inquiry, CID, or subpoena (Correct answer)
- Only when internal counsel lacks expertise in the specific regulatory area involved
- After the internal investigation has been completed and findings documented
Correct answer: As early as possible, ideally upon receipt of any government inquiry, CID, or subpoena
Outside counsel should be engaged early—ideally upon first notice of a government inquiry—to ensure privilege protection, provide strategic guidance, and manage communications with regulators.
Question 4: What is a 'civil investigative demand' (CID) and which agency commonly uses it?
- A subpoena issued by the FBI requiring testimony before a federal grand jury
- A pre-litigation discovery tool used by agencies like the DOJ and FTC to compel document production (Correct answer)
- An administrative summons issued by the IRS to compel financial record production
- A court order requiring companies to produce trade secrets in antitrust proceedings
Correct answer: A pre-litigation discovery tool used by agencies like the DOJ and FTC to compel document production
A CID is a compulsory pre-suit discovery tool used by agencies such as the DOJ and FTC that requires recipients to produce documents, answer interrogatories, or provide testimony without filing a lawsuit.
Question 5: What is the significance of the 'McNulty Memo' in the context of corporate privilege during investigations?
- It established that companies must waive privilege to receive cooperation credit from the DOJ
- It limited DOJ prosecutors from routinely requesting privilege waivers as a condition of cooperation credit (Correct answer)
- It created the framework for corporate monitors in deferred prosecution agreements
- It defined the criteria for designating a company as a 'repeat offender' under federal guidelines
Correct answer: It limited DOJ prosecutors from routinely requesting privilege waivers as a condition of cooperation credit
The McNulty Memo (2006) and subsequent Filip Memo (2008) restricted prosecutors from routinely demanding privilege waivers, recognizing that such demands threatened the integrity of the attorney-client relationship.
Question 6: In an SEC enforcement action, what is a 'Wells Notice' and what does it signal?
- A formal notification that the SEC has decided to file charges against a respondent
- A preliminary notice informing a party that SEC staff intends to recommend enforcement action, allowing a response (Correct answer)
- A court order directing a company to preserve all documents related to an investigation
- An offer by the SEC to settle enforcement proceedings without a formal admission of wrongdoing
Correct answer: A preliminary notice informing a party that SEC staff intends to recommend enforcement action, allowing a response
A Wells Notice informs the recipient that SEC staff plans to recommend enforcement action and invites a Wells Submission—the recipient's opportunity to argue against bringing charges.
Question 7: What is the primary role of a compliance monitor appointed as part of a DPA or NPA settlement?
- To manage day-to-day business operations on behalf of the government during the agreement period
- To independently assess and report on the company's compliance program and remediation efforts (Correct answer)
- To approve all major business transactions during the monitoring period
- To conduct ongoing criminal investigations into company employees on the government's behalf
Correct answer: To independently assess and report on the company's compliance program and remediation efforts
A compliance monitor independently evaluates whether the company is meeting its obligations under the agreement, reporting findings to the government without managing company operations.
CCCP Government Investigation Response 4
Under the DOJ's Corporate Enforcement Policy, what is required for a company to receive the maximum cooperation credit?