The Boundaries of Internal Corporate Investigations Relative to Employee Privacy Rights; A Case Study

Chaim Levin, Chief Legal Officer, Compagnie Financiere Tradition, USA

Corporate internal investigations often involve the complex yet delicate balance between employer and employee rights. An already complicated situation is additionally challenged by a veritable Pandora’s Box of difficult employment and cooperation choices. The corporate employer’s interests and obligations to its shareholders mandate that the enterprise obtain prompt, full disclosure from its relevant employees. In contrast, individual employee interests may be in conflict because of reasonable apprehensions over issues of self-incrimination or of personal privacy rights. Acrimony resulting from these competing interests can be quite contentious and unwelcomed in the business environment. While there is no easy solution or definitive clarity, at least one prominent appellate court carefully evaluated the competing interests of employers and employees and established certain helpful guidelines. The debate starts innocently enough; a corporation learns that there is a possibility of wrongdoing by some of its employees and an investigation is launched. From the outset, a difficult inconsistency may be present; if a corporation generally can only act through its people, the means by which it is now compelled to address individuals possessing material information and who may be, at the same time, responsible for the wrongful or negligent act, is of critical importance. Other thorns in the investigative protocols include the means by which the corporation can persuade or compel employees to cooperate in the inquiry, particularly when the result could lead to their termination of employment or even worse self-incrimination with respect to possible or existing separate governmental, administrative or regulatory actions.

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USA Investigations Banking & Finance August 2018 Vol.11, No. 44, Summer 2018

Chaim Levin

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Chaim A. Levin is the Chief Legal Officer of Tradition America. Mr. Levin has managed important corporate transactions, intellectual property issues, regulatory investigations, employment controversies, corporate governance frameworks, and other matters in the U.S., Central and South America, England, France, Hong Kong, Singapore and the Philippines. Mr. Levin has been the Lead Counsel representing part of the Tradition Group in defending complex national investigations by the Department of Justice, U.S. Securities and Exchange Commission, and 14 State Attorney Generals' offices, Mr. Levin has been awarded the 2015 Legend-in-the-Law by the United States Library of Congress, the American Bar Association and the Burton Foundation. Mr. Levin has also received a 2018 First Chair Award.

Compagnie Financiere Tradition

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Tradition Ameica is a subsidiary of a Switzerland-based interdealer broker (IDB) that acts as a marketplace and intermediary, and facilitates transactions between financial institutions and traders in the capital markets. The Company is active in the financial markets, with focus on money markets, interest rate and currency derivatives, equities and equity derivatives, bonds and repurchase agreements, and credit derivatives, as well as in commodity-related markets, with focus on derivatives in oil, natural gas, power, coal, weather, emissions, precious metals, pulp and paper, and property. The Company is active on several exchanges, and operates in both exchange-traded and over-the-counter markets. It operates in approximately 30 countries globally.

USA Investigations Banking & Finance August 2018 Vol.11, No. 44, Summer 2018