What’s happened over the last 10 years, we have an uptick in whistleblower cases pointing out our fraud, allegations of financial impropriety, these financial obligations got to the audit committee… something failed.
The audit committee would investigate, but it’s too much, we advise in these types of internal financial investigations. We help the audit committee.
The committee doesn’t know the ins and outs and can make things worse – they lack this background and it’s what we provide. Wellfleet helps them with (1) internal investigations – if we get sued do you have to disclose this during discovery? well, depends on how you do it. If you get sued a counterparty would get all of that info if you do it a certain way. Often it’s good to have a law firm outside of the company so that it’s all under Atty privilege; internally vs. private is a concern – should we build in privilege. YES
(2) who is going to do this – this material will be discoverable in a lawsuit if it’s done in house, we recommend you bring in a law firm so everything is privileged and protected.
Outlines and special care in protecting the whistleblower is something else we do.
A lot of subtlety. The audit committee is part of the BOD, they are often wanting to provide comfort, sugarcoat it, sometimes it helps to have an outside party to manage those communications with stakeholders, to eliminate the possibility that familiarity will cause an issue (since these people are at the company and on the BOD).
We do a proper investigation and protect what we find by building in privileges, compliment the boards acumen.