1. DOJ Perspectives on Effective Compliance and Investigations Maxwell Carr-Howard Husch Blackwell, LLP Max.Carr-Howard@huschblackwell.com October 8, 2012

2. Main Justice and 94 US Attorneys make Criminal Prosecutorial Decisions (centralized and decentralized) Some of the Investigative Agencies that make up the Alphabet Soup of Federal Law Enforcement include: The Commission has independent regulatory enforcement authority to issue orders and fines OFAC (limited regulatory enforcement authority) US Enforcement and Prosecution Decision Authority (simplified) © 2012 Husch Blackwell, LLC

3. How Does Justice Evaluate the Effectiveness of Compliance Programs? DOJ’S US Attorney’s Manual: Emphasis on self-policing, but no get-out-of-jail-free cards No “paper tigers,” compliance programs must mean something Test of “adequate program” for the federal prosecutor: –Does it work? Has it prevented or detected violations? Is it organic? –Was it designed with the corporation, its culture, and its structure in mind? –Is it comprehensive, recognizing all possible risks presented? –Are directors, officers, and employees trained and knowledgeable about compliance and the applicable law? Independence is Critical –Board of Directors –Compliance Officers How quickly did you self-report (but don’t jump on this bandwagon) © 2012 Husch Blackwell, LLC

4. What does the United States view as an Effective Compliance Program ? The Sentencing Guidelines (Chapter 8): Create a “culture” of compliance Board of Directors must lead and must be knowledgeable Senior officers with direct access to Board must be responsible for the implementation and supervision of the program Program must effectively detect and deter criminal conduct, real- time monitoring is key Periodic audits and re-evaluation when criminal conduct is detected should lead to modification of the program regularly Anonymous reporting and protections against retaliation critical Compliance must be a risk-based program and its implementation should be adjusted based on newly recognized risks Similar to UK’s Six Principals; more guidance in DOJ settlements © 2012 Husch Blackwell, LLC

5. DOJ Approved Investigations Follow DOJ’s own model, be thorough for your sake Independence is Key for firm and client entity –Don’t use a long trusted advisor for outside counsel –Consider who will hire/control: Management, GC or Independent Directors (what will Government think—no Wal-marts, please) Data, Data, Data… look for evidence of what happened when it happened (but watch privacy and location) Interviews must challenge; test the testimony (outside counsel can take the heat) The investigation cannot be viewed as deferring to authority within the corporation Then use the credible investigation to decide whether to disclose and when you do, use it to tell the best story © 2012 Husch Blackwell, LLC

6. Watch your Privileges And watch your language! We use similar words but attach different meanings. Cross-Border Investigations and multi-national corporations present special challenges for outside counsel and in-house lawyers. The Attorney-Client Privilege v. The Legal Advice Privilege Questions to ponder: Who is the client, who is the lawyer, who controls the privilege, who can waive the privilege, how far does waiver reach, who can invoke the privilege, what law governs (US v. UK, regional differences), and how does all of this impact in-house counsel? The Work Product Protection v. The Litigation Privilege Additional questions to ponder: What is the scope, who can invoke it, does it reach a lawyer’s agent, can a client invoke it, does it last? There is real value in having cooperative cross-border expertise. © 2012 Husch Blackwell, LLC