10 May 2019
On May 2, 2019, a federal district court judge found that a bank and its external counsel had become a de facto arm of the government through efforts to cooperate with the government and minimize the bank's exposure to criminal and regulatory penalties. The ruling serves as a reminder that by aligning too closely with the government's investigative priorities, companies risk opening themselves up to massive discovery obligations in subsequent litigation. In order to minimize these risks, companies seeking cooperation credit should seek to maintain their independence, to the greatest extent possible, in conducting internal investigations.
District Court Decision Highlights Risks of Cooperating Too Closely with Government Investigations