HEIGHTENED RISKS TO COMPANIES

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Mariah Carter
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1 CONFLICTS IN THE REPRESENTATION OF CORPORATIONS AND INDIVIDUALS IN FCPA INVESTIGATIONS KURT STITCHER LEVENFELD PEARLSTEIN GARY COLLINS GE ENERGY FINANCIAL SERVICES DAVID PORTEOUS LEVENFELD PEARLSTEIN IQPC FCPA CONFERENCE JANUARY 28, 2009

PEARLSTEIN GARY COLLINS GE ENERGY FINANCIAL SERVICES DAVID

2 HEIGHTENED RISKS TO COMPANIES INCREASED ENFORCEMENT SECOND HIGHEST DOMESTIC PRIORITY INCREASED INTERNATIONAL ENFORCEMENT GLOBAL OPERATIONS COMPLEX CORPORATE STRUCTURES DISPERSED UNITS AND EMPLOYEES RELATIONS WITH THIRD PARTIES BUSINESS PARTNERS: JOINT VENTURERS; AGENTS; CONSULTANTS VENDORS; SUPPLIERS; DISTRIBUTORS; CONTRACTORS

STRUCTURES DISPERSED UNITS AND EMPLOYEES RELATIONS WITH THIRD PARTIES BUSINESS

3 HEIGHTENED RISKS TO COMPANIES RECENT CASES INVOLVING AGENTS INDUSTRY COUNTRY INTERMEDIARY RECIPIENT OIL & GAS (FOREIGN SUB.) UK NIGERIAN AGENT NIGERIAN CUSTOMS OFFICIAL OIL & GAS (FOREIGN SUB.) NORWAY OFFSHORE CONSULTANT IRANIAN NAT L OIL COMPANY SUB. TELECOM (FOREIGN ISSUER) FRANCE COSTA RICAN CONSULTANTS WIFE OF STATE TELECOM BOARD MEMBER AGRICULTURE U.S. INDONESIAN CONSULTANT INDONESIAN GOV T OFFICIAL DEFENSE U.S. FOREIGN DISTRIBS (S.E. ASIA) FOREIGN GOV T OFFICIALS CHEMICALS U.S. CONTRACTORS/ BUS. PARTNERS INDIAN GOV T OFFICIALS

TELECOM (FOREIGN ISSUER) FRANCE COSTA RICAN CONSULTANTS WIFE OF STATE TELECOM BOARD MEMBER AGRICULTURE U.S. INDONESIAN CONSULTANT INDONESIAN GOV T OFFICIAL DEFENSE U.

4 HEIGHTENED RISKS TO INDIVIDUALS INCREASED ENFORCEMENT v. INDIVIDUALS INCREASED INTERNATIONAL ENFORCEMENT INCREASED COMPANY SELF-REPORTING INCREASED PARALLEL INVESTIGATIONS INTERNAL AND GOVERNMENT U.S. AND INTERNATIONAL INCREASED COMBINED PROSECUTIONS

COMPANY SELF-REPORTING INCREASED PARALLEL INVESTIGATIONS

5 ASSESSING CONFLICTS OF INTEREST TEMPORALITY OF ALIGNED INTERESTS DISPARITY IN PUNISHMENT FINES FOR COMPANY PRISON FOR INDIVIDUAL DETRIMENTAL CONDUCT OF INDIVIDUAL FIFTH AMENDMENT RIGHTS OF INDIVIDUAL INDIVIDUAL CAN REMAIN SILENT; COMPANY CANNOT INDIVIDUAL CAN FRUSTRATE COOPERATION COMPANY CAN APPLY ECONOMIC/EMPLOYMENT PRESSURE

INDIVIDUAL FIFTH AMENDMENT RIGHTS OF INDIVIDUAL INDIVIDUAL CAN REMAIN SILENT;

6 CONFLICTS IN JOINT REPRESENTATION FOREGOING POSITIONAL CONFLICTS SUGGEST ADVERSE INTERESTS INDIVIDUAL HAS SIXTH AMENDMENT RIGHT TO CONFLICT-FREE COUNSEL CONSEQUENCES TO COMPANY CENSORING OF DISCLOSURES DUE TO JOINT PRIVILEGE DISQUALIFICATION OF CHOSEN COUNSEL

TO CONFLICT-FREE COUNSEL CONSEQUENCES TO COMPANY CENSORING OF

7 EVALUATING COLLABORATION SEPARATE REPRESENTATION, BUT COMMON INTEREST DOCTRINE JOINT DEFENSE AGREEMENTS

8 COMMON INTEREST DOCTRINE REQUIREMENTS COMMON INTEREST AMONG TARGETS CONFIDENTIALITY OF COMMUNICATIONS PERMITS MUTUAL DISCLOSURE OF: ATTORNEY-CLIENT COMMUNICATIONS ATTORNEY (AND OTHER) WORK PRODUCT PRECLUDES DISCLOSURE TO THIRD PARTIES

MUTUAL DISCLOSURE OF: ATTORNEY-CLIENT COMMUNICATIONS

9 JOINT DEFENSE AGREEMENTS REQUIREMENTS PROTECTED COMMUNICATION IN COURSE OF JOINT DEFENSE EFFORT DESIGNED TO FURTHER JOINT EFFORT MADE AND KEPT IN CONFIDENCE BY PARTICIPANTS ASSUMES UNDERLYING PRIVILEGE COVERS: ATTORNEY-CLIENT COMMUNICATIONS ATTORNEY (AND OTHER) WORK PRODUCT

AND KEPT IN CONFIDENCE BY PARTICIPANTS ASSUMES UNDERLYING PRIVILEGE

10 JOINT DEFENSE AGREEMENTS KEY BENEFITS COLLABORATION/UNITED FRONT REDUCED COST OF INVESTIGATION PROTECTION AGAINST COOPERATORS (TURNCOATS) KEY DRAWBACKS MAY HINDER COOPERATION (CAN EXEMPT INTERNAL INVESTIGATION) COLLATERAL LITIGATION AGAINST TURNCOATS (CAN AGREE TO INJUNCTIVE RELIEF FOR VIOLATIONS)

DRAWBACKS MAY HINDER COOPERATION (CAN EXEMPT INTERNAL INVESTIGATION)

11 STEIN v. FILIP U.S. v. STEIN, 541 F.3d 130 (2nd Cir. 2008) KPMG WISHED TO COOPERATE WITH GOVERNMENT IN INVESTIGATION OF KPMG TAX SHELTERS AUSAs PRESSED KPMG TO: CUT OFF LEGAL FEES TO NON-COOPERATING INDIVIDUALS ENCOURAGE EMPLOYEES TO MEET WITHOUT COUNSEL KPMG OBLIGED ( DID I JUST RUN SOMETHING OVER? ) SDNY AND 2 ND CIRCUIT HELD THAT PROSECUTORS HAD VIOLATED DEFENDANTS 6 TH AMENDMENT RIGHT TO COUNSEL THOMPSON MEMORANDUM COOPERATION CRITERION (DID COMPANY CUT OFF ATTORNEYS FEES TO ACCUSED EMPLOYEES?) VIOLATED EMPLOYEE S CONSTITUTIONAL RIGHTS INDICTMENTS AS TO SEVERAL EMPLOYEES DISMISSED

INDIVIDUALS ENCOURAGE EMPLOYEES TO MEET WITHOUT COUNSEL KPMG OBLIGED ( DID I JUST RUN SOMETHING OVER?

12 STEIN v. FILIP FILIP REVISIONS TO THE USAM REMOVES WAIVER OF ATTORNEY-CLIENT PRIVILEGE AS BASIS FOR CHARGING AND COOPERATION DECISIONS, AND, INSTEAD, SEEKS PROVISION OF RELEVANT FACTS, NOT WAIVER OF PRIVILEGE DIRECTS PROSECUTORS NOT TO CONSIDER PROVISION OF COUNSEL TO, OR PAYMENT OF LEGAL FEES FOR, EMPLOYEES WHEN ASSESSING COMPANY S COOPERATION INSTRUCTS PROSECUTORS NOT TO DENY COOPERATION CREDIT MERELY BECAUSE COMPANY AND EMPLOYEES HAVE ENTERED INTO JOINT DEFENSE AGREEMENT, BUT CAUTIONS AGAINST CONSTRAINTS ON PROVIDING ALL RELEVANT FACTS

INSTEAD, SEEKS PROVISION OF RELEVANT FACTS, NOT WAIVER OF PRIVILEGE DIRECTS PROSECUTORS NOT TO CONSIDER PROVISION OF COUNSEL TO, OR

12/3/2015. Thomas J. Farrell Farrell and Reisinger, LLC Pittsburgh

12/3/2015. Thomas J. Farrell Farrell and Reisinger, LLC Pittsburgh Brian W. Perry, Esq. PSWZ Law Firm Harrisburg David J. Freed Cumberland County District Attorney Carlisle Thomas J. Farrell Farrell and Reisinger, LLC Pittsburgh A lawyer shall not represent a client if