An internal investigation exists to answer one question — what actually happened — before someone else answers it for you. It is a governance instrument, not a legal filing, and its value depends almost entirely on decisions taken in the first few days: who commissions it, who conducts it, how privilege is structured, and what is preserved. Those decisions are difficult to revisit later, which is why the sequence matters more than the speed.
Waxman Litigation conducts and advises on investigations for companies and their boards. Seth B. Waxman spent 13 years as an Assistant United States Attorney in the District of Columbia, roughly eight of them on fraud and public corruption — the same work an internal investigation does, from the other side of the table.
When does a board actually need one?
Not every complaint requires an investigation, and treating every complaint as one is its own failure. An independent investigation earns its cost when the answer will drive a decision the board must defend — a termination, a disclosure, a restatement, a self-report, or a response to a regulator. Where the allegation touches the people who would ordinarily investigate it, independence stops being optional.
The decisions that must be taken before the first interview
| Decision | Why it is hard to reverse |
|---|---|
| Who commissions it — board, audit committee, or management | Determines independence, and who the investigator’s client is |
| Who conducts it | In-house counsel investigating conduct in their own reporting line is a structural problem |
| Privilege structure | Set at the outset or not at all; it cannot be retrofitted |
| Scope | Too narrow looks like a cover-up; unbounded never ends |
| Preservation | 18 U.S.C. § 1519 reaches destruction in contemplation of a federal matter — up to 20 years |
Preservation comes first, always
Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both. (Added Pub. L. 107–204, title VIII, § 802(a) , July 30, 2002 , 116 Stat. 800 .) U.S. Code Toolbox Law about… Articles from Wex Table of Popular Names Parallel Table of Authorities How current is this? Accessibility About LII Contact us Advertise here Help Terms of use Privacy
18 U.S.C. § 1519
⭐ Note “in relation to or contemplation of“. The obligation can attach before any investigator is appointed, and routine automated deletion is the usual failure.
Interviews are where investigations go wrong
Employees must understand who the lawyer acts for — the company, not them. Getting that wrong contaminates the investigation and exposes individuals. And there is a hard line on what may be said to a witness:
(b) Whoever knowingly uses intimidation, threatens, or corruptly persuades another person, or attempts to do so, or engages in misleading conduct toward another person, with intent to— (1) influence, delay, or prevent the testimony of any person in an official proceeding; (2) cause or induce any person to— (A) withhold testimony, or withhold a record, document, or other object, from an official proceeding; (B) alter, destroy, mutilate, or conceal an object with intent to impair the object’s integrity or availability for use in an official proceeding; (C) evade legal process summoning that person to appear as a witness, or to produce a record, document, or other object, in an official proceeding; or (D) be absent from an official proceeding to which such person has been summoned by legal process; or (3) hinder, delay, or prevent the communication to a law enforcement officer or judge of t
18 U.S.C. § 1512
Employees may be told they are free to seek their own counsel. Telling them what to say is a different matter entirely.
Areas covered
- Accounting & Financial Fraud
- Employee Fraud & Embezzlement
- Whistleblower Complaints & Retaliation Risk
- Workplace Misconduct & Employee Investigations
- Regulatory & Compliance Violations
- Independent Investigations, Monitorships & Oversight
Government and Regulatory Investigations of Organizations
Not every investigation begins inside the organization. A regulator or a government attorney can open one first, and the organization is then running its own inquiry alongside an external one it does not control — on a timetable it did not set. In the District this reaches nonprofit boards directly: under D.C. Code § 29–412.20 the Office of the Attorney General (“OAG”) can issue subpoenas while it is still deciding whether to sue, and the Superior Court can dissolve the corporation, place it in receivership, or impose a constructive trust on compensation already paid to a director or officer. We set out how that statute works, and what the first document demand actually signals, in when the D.C. Attorney General sues a nonprofit.
The practical consequence is that independence stops being a matter of good practice and becomes evidentiary. Where an outside authority will read the resulting report, who commissioned it and how privilege was structured determine whether it is worth anything at all. Related: regulatory and compliance violations and government subpoenas and investigative demands.
What happens with the answer
An investigation that produces a finding no one is prepared to act on has failed. Before it begins, the board should know what decisions the answer will feed: remediation, discipline, disclosure, self-reporting, or defense. Where a government matter is already live, the two must be run together — see parallel criminal and civil proceedings.
Frequently asked questions
Can our general counsel run it?
Sometimes. But where the conduct sits in or near their reporting line, independence becomes the issue a regulator or a court will focus on.
Is the investigation privileged?
Privilege depends on how the engagement is structured at the outset — who instructed the investigator and for what purpose. It cannot be added afterwards.
Do we have to self-report what we find?
That is a separate decision with significant consequences either way, and it should be taken deliberately once the facts are known — not assumed at the start.
What if the complaint came from an employee?
Then retaliation risk attaches immediately and independently of the merits. See whistleblower complaints and retaliation risk.
How long should it take?
Long enough to be credible and short enough to be useful. Scope, not speed, is what usually determines that.
Sources and legal authorities
General information, not legal advice. How an investigation should be scoped, who should conduct it, and how privilege is handled are decisions that turn on the specific facts and should be taken with counsel before the first interview.
Related: White-Collar Defense · Government Subpoenas · Business Litigation · Court-Appointed Receiverships. Call (301) 901-3109 or use the contact page.