Internal Investigations: <i>Upjohn</i> Warnings Are No Longer Enough

Much has been written recently about the government's continued insistence, in both criminal and SEC enforcement investigations, that corporations waive the attorney-client privilege in order to 'fully cooperate' with the government. This pressure has been augmented by the increasing reluctance of auditors for public companies to sign off on their audits unless they review the client's internal investigatory report ' an act that also may cause waiver of the privilege. See, In re: Subpoena Duces Tecum Served on Willkie Farr &amp; Gallagher, (1997 WL 118369 (SDNY 1997)). What has received less attention is the countervailing pressure for truth and candor toward prospective witnesses, not only by government attorneys in the context of parallel criminal and civil investigations, but also by private attorneys when conducting corporate internal investigations.<br/>The increased likelihood in the post Sarbanes-Oxley world that a corporation will waive the privilege and produce the substance of its internal investigation, including its investigative reports, needs to be juxtaposed with the duty to be honest with a corporation's employees when conducting an internal investigation. The relationship of these two duties raises serious doubt that the standard Upjohn warnings ' ie, we represent the company, our conversation is privileged, but the company may 'waive' the privilege in its sole discretion ' is consistent with the reasonable expectations of employees and a lawyer's ethical duty to be honest and candid.

35 minute read June 28, 2006 at 11:23 AM

By

Jeffrey L. Bornstein