The "perfect storm" of whistleblower activity is a global phenomenon that is creating a need for more internal investigations, said panelists at the Asia Ethics Summit in Hong Kong.
Mike Delikat, chair of the Whistleblower Task Force at Orrick, Herrington & Sutcliffe New York, said that he has seen dramatic changes to the interpretation of whistleblower protections, which are encouraging more individuals to come forward.
“There have been statutory and regulatory changes in whistleblower protection, as well as new monetary incentives to come forward,” said Delikat.
Delikat described a recent example of a large bounty payment where the Securities and Exchange Commission (SEC) in the U.S. awarded $13 million to an unidentified whistleblower, whose information led to SEC enforcement action that recovered investor funds.
TJ Tan, managing director of FTI Consulting’s forensic accounting and advisory services, spoke about the best practices for weathering the "perfect storm" of whistleblower activity. He said the four key components of internal investigations are thorough reviews of the company’s books and records, interviews with employees, obtaining business intelligence, and the use of computer forensics.
“Some considerations when planning an internal investigation are to be clear, to look at the relationships between the company and its and vendors and external parties, and then to assess the extent of the wrongdoing,” said Tan.
Andrew Dale, partner at Orrick, Herrington & Sutcliffe in Hong Kong, elaborated on some best practices of handling whistleblower investigations.
“The first 24 to 48 hours of an investigation are crucial, because a lot of the information which is available can disappear,” he said.
To help anticipate investigations in advance, Dale said that it is essential for individuals to know their corporate structure, compliance policies, cultural differences, and the local law.
The Asia Ethics Summit, jointly organised by the Ethisphere Institute and Asian Legal Business, was held on Dec. 4 and 5 at the Renaissance Harbourview Hotel in Hong Kong.
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