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Business Litigation Alert - "How Effective Are Your Business Detectives?"

Allegations of bribery by Wal-Mart in Mexico have made headlines around the world. Not only has the company been accused of bribing local and federal officials, but also of a cover up after an internal investigation uncovered this activity.

The Wal-Mart case is a prime example of the critical information internal investigations can uncover, as well as the need for company checks and balances to ensure that any activity uncovered by an internal investigation is handled appropriately - whether that means resolving internally or reporting to a regulatory agency or the authorities.

A stress test for your internal investigation plan is a good way to make sure that, should a problem arise, nothing falls through the cracks.

Ask the following questions of your company:

  • What potential problems could my company face that would require an internal investigation? What would the ramifications of these problems be, and how should they be handled or reported?
  • Should one of these problems arise, what procedures do we have in place to carry out an internal investigation? Who are the point people that will handle the investigation, and to whom do they report their findings?
  • Is a follow-up plan in place? Who is responsible for making sure the investigation is completed and that a final resolution has been established?

An investigation is only as good as its ultimate resolution. In the end, what matters more than what is uncovered is how the company handles the issues it finds. Time and again we have seen that the truth most often comes out whether it is reported or not.


Jeff Elkin is a partner in the litigation section of Porter Hedges LLP.
He can be reached at 713.226.6617 or jelkin@porterhedges.com.

This information is made available for educational purposes only and does not offer specific legal advice or create an attorney-client relationship with Porter Hedges. Do not use this information as a substitute for specific legal advice. Attorney advertising.

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