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Many Corporate Internal Investigations Conducted by Former DOJ and SEC Employees

Posted May 24, 2011 5:30 AM CDT
By Debra Cassens Weiss

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Internal corporate investigations are a big business for the lawyers who conduct them—often former employees of the Justice Department and the Securities and Exchange Commission.

The results of the probes are often shared with the DOJ and the SEC, which decide whether to do additional investigation or to bring charges, the Washington Post reports. “As the U.S. government steps up investigations of companies suspected of paying bribes overseas, law enforcement officials are leaving much of the detective work to the very corporations under suspicion,” the story says.

In one case, a probe conducted by the law firm Steptoe & Johnson and the accounting firm Ernst & Young is under fire by former employees accused of corporate wrongdoing.

The firms investigated bribery allegations against Control Components Inc., resulting in a guilty plea by the valve manufacturer in 2009. Several former employees charged with crimes allege they were scapegoats in the corporate probe, parts of which were recited almost verbatim in their indictments. The former executives sought release of additional documents, but a judge ruled against them after the company said the materials were protected by attorney-client privilege.

Related coverage:

Reuters: “SEC's revolving door to Wall Street gets fresh scrutiny”

Washington Post and Bloomberg Business: “SEC staff’s ‘revolving door’ prompts concerns about agency’s independence”

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