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Corporate Compliance Insights
Home Featured

How Can Lawyers Work with Monitors to Achieve Better Outcomes?

Potential Issues in Corporate Monitorships, Part 5

by Jay Rosen
July 3, 2019
in Featured
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Jay Rosen concludes his exploration on issues in working with monitors by considering how lawyers can engage monitors – most typically when their clients are under investigation for some regulatory issue, such as an FCPA enforcement action.

Don’t Wait Too Long

The biggest mistake outside counsel can make is waiting too long before bringing on an independent monitor.

AMI’s experience is that if you wait until after the conclusion of a matter, you have lost valuable time and potentially cost yourself money in the form of higher fines and penalties. The government expects compliance shortcomings to be remediated during the pendency of an investigation.

A monitorship can even begin before self-reporting to the government. This is because a company should want to find the problem before it voluntarily reports the problem to the government; the company could receive credit for having done so. It also allows the company to package the entire process in a way to say, “not only did we discover the problem, but we are also reporting the problem and, by the way, we have also fixed it.”

The company explains that they used an independent third party and may even want to keep that third party with the company to independently assess how to proceed on a go-forward basis. That’s very persuasive to prosecutors and we’ve certainly seen situations where, in some cases, it’s resulted in a declination or in a significantly diminished fine and penalty.

Demonstrate a Serious Commitment to Compliance

Using an independent monitor in this proactive manner demonstrates how serious the company is about compliance. It can also be a way to establish any illegal conduct that may simply have been an outlier and does not reflect the values, culture and the way the company generally conducts business. This can provide quite a positive story to present to prosecutors, particularly under the current FCPA Corporate Enforcement Policy.

Active Remediation

If your company is active in the remediation phase, particularly through an independent monitorship, it shows that you are looking at the problem with a holistic approach. This is more than assessing the problem and consists of coming up with set of solutions and then implementing these controls. More importantly, an organization is taking that information and looping it back in, literally in a feedback loop so the companies can continuously improve their compliance program. This also can be persuasive to regulators.

Repeat Offenders

This approach is even more critical for what we call “repeat offenders” or recidivist actors.

Government regulators are becoming much more sophisticated in differentiating whether a company’s compliance program is simply a paper program or if it has teeth.

The government wants to know if this a real program. One clear indicator is the feedback loop from an assessment by an independent monitor looping the information back to the company, making changes, testing to see whether the changes are real changes that are working changes.

Credibility with Prosecutors

Using an independent monitor increases a company’s credibility. Affiliated Monitors has consistently heard from white-collar practitioners perhaps the most important thing in any FCPA investigation or enforcement action is credibility with the prosecutors. Working with a truly independent monitor who is independent of the outside counsel and may be heading up an investigation and assessing the compliance program is one more way to demonstrate credibility in front of the prosecutors.

As my colleague Don Stern, a former U.S. Attorney for Massachusetts said, “your reputation in representing clients before the government is absolutely critical. Having that independence as a monitor can aid a company by giving credibility to their compliance program efforts, and this can pay off with real benefits in terms of lesser penalties, all the way to a declination.”


In case you missed the earlier installments of this ongoing series, please see the links below.

Everything You Always Wanted to Know About Monitors But Were Afraid to Ask

Part 1: Corporate Monitorship 101: Who Are They, and What Can You Expect?

Part 2: What is a Post-Resolution Monitorship?

Part 3: What is the Power of a Pre-Settlement Monitorship?

Part 4: What Issues Should a Company Consider When Hiring a Corporate Monitor?

Part 5: How Much Will a Corporate Monitorship Cost?

Potential Issues in Corporate Monitorships

Part 1: What are the Fears and Concerns of Working with a Monitor?

Part 2: What is the Impact of Monitors?

Part 3: How Do Monitors Work?

Part 4: How Can Regulators Leverage Monitors?


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Jay Rosen

Jay Rosen is Vice President, Business Development and Monitoring Specialist at Affiliated Monitors, Inc., the first company in the U.S. to focus on providing independent integrity monitoring and assessment services across a wide range of regulated industries and professions. Jay previously headed up Merrill Brink’s FCPA Investigations and Ethics and Compliance translation group. He has over eight years of experience assisting clients on cross-border investigations, as well as helping them localize their code of conduct and other mission-critical English documents for their global colleagues. For almost three years, Jay has co-hosted the #1 weekly FCPA podcast, “This Week in FCPA,” with Tom Fox. Tom and Jay recently launched a second podcast, “Popcorn and Compliance,” and Jay is also a commentator on the biweekly podcast, “Everything Compliance,” with Jonathan Armstrong, Tom Fox, Sarah Hadden, Matt Kelly and Mike Volkov.

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