All financial services companies are vulnerable to regulatory interventions that require independent investigation and fact finding. The insurance industry is highly regulated by a fragmented, worldwide network of regulations issued by the 50 states and by every foreign country. In addition, insurers are subject to the various extraterritorial anticorruption regimes established by the United States and other jurisdictions such as the Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act, economic sanctions systems such as those created by the U.S. Office of Foreign Assets Control (OFAC), and broad anti-money laundering (AML) regimes. These multifaceted regulatory schemes combine civil and criminal consequences for employee misconduct, on top of the more traditional financial reporting scrutiny imposed by the U.S. securities laws, non-U.S. equivalents, and international accounting standards.
By far, the best approach to these regulations is diligent preparation and the creation of systems and controls that assure compliance and company qualification for such "safe harbors" as exist in the law. But all such systems are vulnerable to employee misconduct and to allegations by regulators or whistleblowers, and every company needs a credible and trustworthy investigatory capability.
We believe that corporate investigations must be guided by a firm grasp of the business practices of the industry and the company undertaking such investigations. Business knowledge guides inquiry under the law and makes investigations more reliable and far more efficient. When coupled with a deep understanding of the law and regulations and, most importantly, the customs and practices of the responsible regulators, such business sophistication can drive investigations toward what really matters, away from expensive sideshows or wasted effort. The result, we have found, is successful resolution of the issues for the company, whether that entails defending the conduct in question fully, working through incidents of misconduct with the regulators, or adjusting systems and controls to prevent recurrence.
At Crowell & Moring, we combine the broad experience of our insurance practitioners with the regulatory and investigatory knowledge of our investigators. This approach brings together professionals with significant backgrounds in insurance, including a former general counsel of a large international insurer, with investigatory lawyers, including former senior regulators and federal prosecutors as well as renowned civil and criminal defense lawyers. The resulting array of experience extends to every significant regulatory regime and to all of the meaningful risk exposures that insurers face. Our unique approach in combining leading insurance practitioners with skilled and experienced investigators will help assure regulators and prosecutors that our review of the internal conduct is thorough, comprehensive, and reliable. Often, this obviates the need for a full-blown governmental investigation of the same set of facts.
Our internal investigations have spanned all disciplines, including antitrust allegations, procurement fraud, accounting irregularities, foreign bribery, kickbacks/embezzlement, and every form of securities law enforcement action. In 2011, we litigated one of the very few FCPA cases to go to trial and obtained a complete dismissal. In many other cases, investigations led to clear and efficient resolution of the issues at hand. For example, in 2013, we secured the first-ever nonprosecution agreement with the SEC, along with a similar agreement with the Justice Department, in a groundbreaking resolution of significant FCPA allegations for a major global retailer based on conduct at one of its foreign subsidiaries. For the insurance industry specifically, our lawyers have investigated irregular insurance programs in multiple countries, allegedly improper insurance marketing practices in the U.S. and abroad (including S166 undertakings in the United Kingdom and sweeping allegations of bid rigging in the commercial insurance markets), and a wide variety of matters for health care insurers.
Our lawyers have successfully navigated investigations in Thailand; Mexico; various Middle Eastern, African, Asian, and South American countries; and all over Europe and the United States. These investigations regularly implicate questions of local law and regulation as well as the major extraterritorial regulatory regimes, and they often involve tensions between local law and acceptable custom, on the one hand, and extraterritorial reach on the other.
One result of this broad and diverse experience has been a solid and growing reputation for excellence in the field. Our White Collar & Regulatory Enforcement Group, which is home to most of our seasoned investigators, was named "White Collar Group of the Year" by Law360 in 2012 and an "FCPA Powerhouse" in 2013. Six of our lawyers have received individual recognition for excellence in Chambers USA and other similar organizations. Besides being lauded for effective and efficient post-facto investigations, our lawyers have become a critical resource for clients looking to prevent trouble and to create effective compliance systems. These are invariably based not just on the letter of the law but on a thorough understanding of regulatory dynamics, risk factors, and the businesses being conducted.
- Antitrust. We have a long history as one of the most active firms in the country in dealing with antitrust allegations. We have represented clients accused by whistleblowers or prosecutors of price fixing or bid rigging in various retail or wholesale markets, including: energy, airlines, insurance, automotive parts, fruit, electronics components, transportation of commodities, and computer displays.
- Financial Reporting, SEC, and Money Laundering. We regularly represent companies and individuals under scrutiny for financial reporting irregularities. Our engagements have run the gamut of regulatory regimes, from revenue-recognition allegations in different industries, to risk-transfer and deposit accounting allegations for the insurance industry, to regulatory inquiries arising from, or leading to, financial restatements. We have carried out large-scale anti-money laundering (AML) investigations for global financial institutions and represented broker-dealers across a range of investigatory issues.
- FCPA, OFAC, Sanctions, Embargoed Countries. Our FCPA engagements have extended across a multitude of industries and countries of concern. We have dealt with internal FCPA investigations and corporate FCPA defense for operations in the telecom, aerospace, insurance, freight, aviation, mining, technology, and investment industries. Our work has included investigations in Egypt, China, Thailand, Mexico, Philippines, India, Qatar, and South Korea as well as more regional or entirely global allegations of corrupt practices. In addition, we regularly counsel clients, and defend them, in connection with the complex regulations issued to prevent U.S. companies from doing business in certain countries. Many of our lawyers were regulators or prosecutors and understand the priorities and inclinations of regulators who enforce these regimes.
- For the Insurance Industry: Although our investigatory practice spans all industries, our lawyers have had direct experience with the investigatory/regulatory issues of concern to the global insurance industry in recent years. These range from the so-called Spitzer investigation, where one of our lawyers represented a major international insurer, to a variety of financial and market conduct investigations of international insurer operations. Conversely, one of our lawyers was the co-lead prosecutor in the investigation of a major insurer for alleged securities fraud, and another Crowell lawyer supervised multiple SEC enforcement investigations involving accounting practices at public reinsurance companies. We also have extensive experience with investigations of health insurers, ranging from market conduct issues to corruption allegations.