Kevin McGrath Published in Bloomberg Corporate Law Journal
"Pitfalls Awaiting Director Overseeing Internal Investigations: What You Don't Know Can Hurt the Company, and You"

Kevin McGrath's article, "Pitfalls Awaiting Director Overseeing Internal Investigations: What You Don't Know Can Hurt the Company, and You," was published in the Winter 2009 edition of the Bloomberg Corporate Law Journal. According to Kevin, "The Sarbanes-Oxley Act of 2002 (SOX) increased the responsibilities imposed on directors for ensuring that their company complies with all applicable laws and regulations." He further notes that "internal investigations present a variety of often difficult, and sometimes not so obvious, challenges for directors. They must ensure that the company conducts an investigation that is thorough, unbiased, accurate in any communications with the governmental agencies, outside auditors, and the press, and in compliance with the company's legal interests and privileges in accordance with their fiduciary obligations."

Kevin's article discusses the issues directors have primary responsibility for resolving when overseeing internal investigations. Specifically, he focuses on recent cases and developments concerning: "1) the proper composition of an Audit Committee or Special Litigation Committee; 2) the powers that should be granted to such a committee; 3) factors to be considered in deciding whether to report findings of wrongdoing and to whom; 4) the appropriate handling of any such disclosures to avoid unnecessarily waiving the committee's or the company's attorney-client and work product privileges; and 5) recent changes to federal obstruction of justice statutes and Department of Justice policies that impact the handling of internal investigations."

Kevin explains that "there are many issues directors and their counsel must consider in supervising internal investigations. Getting any one of these decisions wrong can have draconian consequences for the targets of the investigation, the company and the directors themselves." Kevin concludes that he hopes his article "will serve to alert directors of the dangers that await them at every stage of an investigation and to encourage them to proceed with extreme caution and with due deliberation every step of the way."