Five Stages of a Comprehensive Investigation

A comprehensive investigation of potential violations of antitrust laws of the United States (and other countries ) should proceed in five stages. Except for the Fifth Stage, Education and Compliance, each stage is an essential precondition to the next stage.

First Stage: Authorization and Directive from the Board of Directors To demonstrate that the Company (1) has terminated its participation in the conspiracy, (2) is undertaking affirmative steps to defeat or disavow the purpose of the conspiracy and (3) is seriously committed to conducting a thorough investigation of potential antitrust violations, Board action is required to authorize the investigation and to require officers and employees to cooperate with the investigation.

Preferably, at one Board meeting, the following actions should be taken, with counsel present to preserve confidentiality:

Counsel should advise the Board that potential antitrust problems involving the Company appear to have occurred and that various resolutions from the Board of Directors are necessary to respond to those problems.

Counsel should advise the Board of the nature of the conduct that is known or suspected but should avoid disclosing incriminating details. As importantly, counsel must advise the Board of the potential direct and collateral consequences of the Companys participation in criminal antitrust activity.

The Board must adopt a resolution which condemns, repudiates and disavows any illegal activities or arrangements involving the Company and its employees and which directs that all such activities or arrangements cease immediately.

Assuming that counsel has been employed, the Board should adopt a resolution instructing counsel to conduct a thorough investigation of any potential antitrust violations, to report to the Board the results of the investigation and to make appropriate recommendations to respond to any problems which are uncovered.

The Board must direct all officers and employees of the Company to cooperate fully with the investigation.

Second Stage: Collecting and Reviewing Documents Outside counsel will provide a list of categories of documents for which responsible employees of the Company must make a thorough search of all files in which documents responsive to any listed category are likely to be contained.

Outside counsel must have access to all documents, including documents stored on electronic media, such as electronic mail, which may indicate the existence and extent of potential violations of the antitrust laws.

Under the direction of a senior officer of the Company and outside counsel, documents will be collected and sent to one or more locations for review. If responsive documents are located outside the United States, they probably should not be sent to the United States for review.

The collected documents will be reviewed thoroughly by outside counsel, who will determine whether additional documents must be gathered. Third Stage: Interview of Persons Who May Have Knowledge or Information about Potential Violations of Antitrust Laws After review of documents has been completed, outside counsel will conduct interviews of each person who they believe has or may have knowledge of information relevant to the potential violations of the antitrust laws. ^[22] The identity of the persons to be interviewed will be determined initially from the review of documents and from persons known from other sources to have knowledge of information relevant to potential antitrust violations.

When employee(s) provide information which counsel reasonably believes may lead to a disclosure that the employee(s) participated in criminal conduct, outside counsel must advise the employee(s) to consult his/her own attorney before proceeding with the interview.

The interview(s) of employee(s) suspected of participating in illegal conduct should not proceed without the express approval or outside the presence of the employee(s) personal counsel.

As interviews proceed, other persons who may have relevant knowledge may be identified, and they, too, will be interviewed.

If some or all employees are foreign nationals who do not reside in the United States, careful thought must be given to the location of their interviews. For several reasons, interviews of foreign nationals who do not reside in the United States should probably not be conducted in the United States.

The interviews will continue until outside counsel is satisfied that the extent of potential violations has been fully explored.

Fourth Stage: Preparation of Report and Report to Directors Upon completion of interviews, outside counsel will prepare a report of findings and conclusions for the Board of Directors.

Outside counsel will more than likely make an oral report ^[23] to the Board of the scope of any illegal conduct that was discovered . Counsel will again explain to the Board the direct and collateral consequences to the Company of its participation in the suspected illegal activity.

Outside counsel will make recommendations to the Board for actions to assure that any problems which were discovered are addressed appropriately.

Recommendations will likely include matters such as terminating or suspending employees suspected of being involved in the illegal conduct, making restitution to victims of the conspiracy and taking other actions which disavow or defeat the purpose of the conspiracy.

Especially if involved employees are to be suspended or terminated, counsel will describe to the Board, the Companys risks and benefits of making application for leniency to appropriate law enforcement agencies and, if the application is accepted, making full disclosure of illegal activities to those agencies.

Simultaneous applications for leniency in several jurisdictions may be necessary. Law enforcement authorities in several foreign jurisdictions, including those in Canada, the United Kingdom and the European Union, have adopted leniency programs which are modeled on the DOJs leniency program.

If the Company does not already have a written antitrust compliance policy and an antitrust compliance program, outside counsel will present to the Board of Directors a written antitrust compliance policy and a written antitrust compliance program, which should be adopted by the Board, with directions to appropriate officers for prompt implementation.

Fifth Stage: Education and Compliance If the Company does not already have an antitrust compliance program, such a program must be adopted and implemented promptly. ^[24]

Antitrust compliance training is an important aspect of the Companys affirmative action to disavow the purpose of the antitrust conspiracy and thereby to withdraw from it.

Whether the Company has an existing antitrust compliance program or has just adopted one, the Company must implement the policy and program by conducting seminars and taking other appropriate steps to emphasize to all officers and employees whose job functions involve certain activities, such as pricing of products, sales, production, credit and transportation, concerning their own and the Companys responsibilities to comply with the antitrust laws of all countries in which the Company is doing business.

Seminars and other antitrust compliance training should be conducted at least annually.

In addition to providing for compliance training, the antitrust compliance program must contain (a) procedures for employees to report suspected antitrust violations anonymously and without fear of retaliation; (b) procedures to investigate such reports ; and (c) disciplinary actions, including termination and nonpayment of attorneys fees, to be taken when an employee is found to have violated the Companys antitrust compliance policy.

^[22] Preliminary interviews may be appropriate before documents are collected to determine what documents may exist and where relevant documents are located. Frequently, knowledgeable employees will be interviewed several times during an investigation.

^[23] Counsel will likely retain any written report and work product from the investigation in counsels files.

^[24] The Company need not await the results of the investigation to adopt and implement an antitrust compliance policy and program.