Two recent cases have focused attention on the hard choices faced by company counsel involved in criminal investigations and prosecutions.
The cases didn’t involve the FCPA. But they hold lessons for lawyers and executives dealing with FCPA compliance and enforcement.
In November, the DOJ indicted GlaxoSmithKline’s associate general counsel Lauren Stevens for obstruction and making false statements to the FDA during an investigation of her company’s products and labelling practices.
“There is a difference between legal advocacy based on the facts and distorting the facts to cover up the truth,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts, who announced the indictment. “Federal agencies such as the FDA cannot protect the public health if the entities and individuals they regulate provide false information and conceal the true facts. . . .”
Last week, law.com reported that the judge might dismiss the case “due to a prosecutor’s grand jury error.” Still, Stevens’ indictment for obstruction, punishable by up to 20 years in prison, should concern company lawyers responding to internal and external FCPA investigations.
Another case about company counsel was reported this week by Ellen Podgor. The Third Circuit looked at attorney-client privilege between Sutton Keany, former U.S. outside counsel to Morgan Crucible, a public company based in Britain, and Ian Norris, the one-time CEO of the company who was later convicted in the U.S. of obstruction.
The court found that Keany had represented not any individual within the corporation but only the company itself. So no privilege existed between Keany and Norris.
Podgor said the case is a warning “to all the corporate executives that are cooperating with corporate counsel thinking that the individual is representing them — beware….”
We also view it as a warning to company counsel, both inside and outside. The case means lawyers will be more vulnerable to pressure from the DOJ to testify against executives at client companies. And lawyers who may themselves be facing the threat of indictment for obstruction will make particularly easy targets.
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Download the Third Circuit’s opinion in U.S. v. Ian Norris here.
Download the indictment in U.S. v. Stevens here.