Internal Investigations
If you are a CEO, general counsel or board committee member, you want experienced, independent guidance to help you determine whether an internal corporate investigation is necessary, and to take any necessary remedial action. Porter Hedges provides the help you need with lawyers who have decades of experience as former state and federal prosecutors. We are intimately familiar with the necessary steps to investigate internal and external fraud, alleged stock option backdating, shareholder derivative suits, as well as white collar criminal allegations. If you face criminal or civil complaints over alleged insider trading, securities fraud, Foreign Corrupt Practices Act (FCPA) violations, CFTC violations, or RICO Act violations, you can rely on the experience we have gained representing a large number of entities, including their officers, directors, witnesses, and targets, in state and federal investigations and prosecutions.
General Corporate Practices
In-house general counsels, CEOs, and board committee members regularly consult with Porter Hedges about their general corporate practices, fiduciary responsibilities, the business judgment rule and numerous other issues that can arise in the context of internal investigations, mergers and acquisitions, asset dispositions, employee malfeasance and takeover bids. Our work in this area includes:
- Preparing and/or revising of shareholder rights plans
- Composition and procedures of boards of directors and committees, including the enhanced role of audit committees
- The board's oversight function
- "Best practices" for boards, committees, individual directors and officers
- Development of board committee charters, governance guidelines, codes of conduct and other corporate programs, policies and procedures
- Corporate governance-related disclosure requirements
- Self-evaluation systems
- Director and officer fiduciary duties and responsibilities
- Executive compensation
Examples of our general corporate governance include:
- Advising a board of directors committee in an internal investigation regarding a stockholder derivative action that alleged accounting improprieties
- Reviewing the policies and procedures underlying its Foreign Corrupt Practices Act compliance program for a publicly held energy services company
- Representing a special board committee in connection with a $435 million series of transactions among controlling shareholders
- Settlement of executive compensation arrangements associated with employment terminations by insurgent shareholders
- Advising an NASD member firm against claims of fraud and breach of fiduciary duty asserted by investors in an Internet development company
Representation of Special Committees of Boards of Directors and Related Experience
We regularly represent standing committees of boards of directors in a wide variety of matters. Among the most prevalant types of representations are:
- Representation of special committees in merger and acquisition transactions and related party transactions
- Representation of boards and board committees in the implementation of defensive strategies
- Representation of audit and special committees in connection with restatements of financial statements, allegations of accounting irregularities and financial reporting improprieties, internal corporate investigations and SEC and/or stock exchange inquiries
We also represent boards and committees in the development of corporate compliance programs, business ethics codes and compliance with the Sarbanes-Oxley Act, as well as representation of committees and outside directors in corporate reorganizations and bankruptcy proceedings. Our internal investigations experience includes:
- We investigated and reported on a wide range of allegations including rigging bidding processes and accepting lavish gifts from vendors for a leading provider of electricity and water supply to the lower Colorado River Basin. The result was extensively re-written policies and procedures
- A company purchaser and a broker set up a false middleman to broker sales of oilfield equipment. As a result of our investigation and report to federal authorities, they were indicted, convicted, and imprisoned
- Investigation for one of the world's leading providers of offshore drilling services involving alleged Foreign Corrupt Practices Act violations
- Conducting an FCPA practice audit for a major provider of pressure pumping, cementing stimulation and coiled tubing services to the oil and gas industry
Shareholder derivative suits in which we have provided counsel include:
- A shareholder derivative suit against a leading provider of seismic data and related geophysical expertise involving revenue recognition practices and misapplication of corporate funds by senior executives. After review of our report, plaintiff's counsel dismissed their suit. The CEO was criminally prosecuted
- A shareholder derivative suit alleging fraudulent billing practices involving a provider of services to the oil and gas exploration and production industry. The suit was voluntarily dismissed during the internal investigation
- A shareholder derivative suit addressing an earnings management issue against one of the world's largest offshore drilling companies
- A shareholder derivative suit involving potential accounting discrepancies relating to certain types of funeral contracts for North America's largest single provider of funeral, cremation and cemetery services
- A shareholder derivative suit relating to Florida funeral practices
- A shareholder derivative suit arising from an IPO for a biopharmaceutical company. The case settled
- A shareholder derivative suit against a leading technology-focused seismic solutions company for allegedly improper due diligence in acquiring a company
- A shareholder derivative suit against one of the world's largest manufacturers of geosynthetic lining products arising from a "going private" merger
- A shareholder derivative claim involving one of Houston's largest natural gas providers in its merger with another provider
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