Litigation Services Handbook, 2015 Cumulative Supplement: The Role of the Financial Expert, 5th Edition

CHAPTER 13A

REMEDIATION (NEW)

Jonny J. Frank

CONTENTS

13A.1 Introduction

(a) Legal Implications

(b) Business Benefits

13A.2 Remediation versus Investigation

(a) Requisite Knowledge, Skills, and Experience

(b) Same or Different Firm or Team

13A.3 Independence and Privilege

13A.4 When to Start

13A.5 Root Problems and Causes

(a) Cressey's Fraud Triangle

(b) Pressures and Incentives

(c) Rationalization

(d) Opportunity: Controls and Compliance Program Flaws

13A.6 Remote or Pervasive

(a) Wrongdoer Misconduct

(b) Misconduct by Others

13A.7 Discipline of Primary and Secondary Actors

13A.8 Enhancing Compliance Program and Controls

13A.9 Self-Reporting

(a) Likelihood of Becoming Public

(b) Thoroughness of the Investigation

(c) Adequacy of the Remediation

(d) Legal, Regulatory, and Professional Obligations

(e) Likelihood of Sanctions if the Government Discovers Misconduct

13A.10 Restitution and Recovery

13A.11 Damaged Culture and Relationships

Appendix: Assessing the Remediation Program

NOTES

13A.1 INTRODUCTION

Remediation is the corporate equivalent of medical rehabilitation. Just as patients recuperate and prevent recurrence, so too must organizations recover and prevent the recurrence of business misconduct. Remediation encompasses the following activities:

• Analyzing the root problems and causes
• Detecting other misconduct
• Disciplining the primary and secondary offenders
• Correcting compliance program and control weaknesses
• Considering self-reporting
• Making restitution to the victims