Don’t Get Trumped: How To Protect Attorney-Client Privileges During an Audit When Investigators Hold All The Cards

No company is immune to investigation by regulating bodies—especially U.S. Presidential candidates.

Today, CNN confirmed that New York Attorney General Eric Schneiderman’s office is investigating Donald Trump’s charitable foundation “to make sure it’s complying with the laws governing charities in New York.”

“We’ve inquired into it,” Schneiderman told CNN‘s Jake Tapper on “The Lead,” Tuesday.

“We’ve had correspondence with them. I didn’t make a big deal out of it or hold a press conference. But we have been looking into the Trump Foundation to make sure it’s complying with the laws governing charities in New York.”

This should come as no surprise after news sources reported that Trump has not contributed to his own foundation since 2008 and that has, instead, spent money from his charity on himself (via CNN).

The current investigation follows a recent fine, issued to the Trump Foundation by the IRS for $2,500, for making a $25,000 donation to a group supporting the campaign of Florida Attorney General Pam Bondi in 2013. Bondi’s office was considering opening an investigation into Trump University, although no formal investigation was ever opened, reports CNN.

Trump isn’t the only one in hot water these days. Another investigation has headlines boiling over. Wells Fargo’s unauthorized account creations and subsequent employee firings have quickly overwhelmed the news cycle.

And, Girard Gibbs Law Firm just announced they are investigating reports that Wells Fargo used customers’ private information to open as many as 1.5 million unwanted checking and savings accounts, and more than 500,000 credit cards without customers’ knowledge or consent, according to BusinessWire.

Although Wells Fargo announced a settlement with regulators last Thursday, this is likely not the first or last time the bank will face additional lawsuits on this matter, either from customers who were harmed or ex-employees who may have been forced to quit by the bank’s practices (via LA Times).

Like the Wells Fargo scandal, investigations into wrongdoing can come out of nowhere. All it takes is one disgruntled ex-employee or client—even political agenda—for a corporation to find itself in Wells Fargo’s (or Trump’s) position.

During such an event, a critical issue faced by in-house counsel is how to keep their communications privileged.

Courts require that corporations prove that communications and documents shared with in-house counsel are protected by the attorney-client privilege. If you’re unable to satisfy this burden, you could be required to produce confidential attorney-client communications in court.

If you’re unsure how to protect yourself and your firm, take The Center for Competitive Management’s webinar, “Protecting Attorney-Client Privileges During an Audit or Investigation.”

In it, counsel will learn best practices for guiding a company in protecting attorney-client privileges during an audit or investigation, and when negotiating a deal, such as:

  • Key legal issues surrounding the attorney-client privilege in investigations and audits
  • Who has the privilege
  • What privilege protects or how privilege can be lost
  • How privilege can be inadvertently waived
  • How to shield information
  • Advice on disclosure without waiving the company’s privileges
  • Complications that arise due to the dual nature of in-house counsels role
  • Privilege issues that arise from ‘non-attorney’ communications
  • How to segregate business and legal advice
  • Steps to take to maximize privilege protection
  • How foreign privilege laws affect privilege

Although the word “privilege” may, in theory, mean a special right, advantage, or immunity granted or available only to a particular person or group of people; in practice, your “privilege” may be taken away if your firm doesn’t follow best practices.

So, don’t leave your company open to scrutiny by the courts. Investigate your own in-house policies for attorney-client privileged communication and consider:

  • Conducting a risk assessment of your organization’s devices, including computers, tablets, mobile phones, USB drives, cloud storage, etc.;
  • Updating your encryption software, firewalls, antivirus software and other security, like password protection policies and circulate these policies to teams;
  • Educating your employees and clients about what is, and is not, protected by attorney-client privilege or simply by adding a disclaimer to documents;
  • Reminding employees and clients that e-mail is not always the safest communication tool for confidential information
  • Developing strategies for managing private internal communications, such as adding the words, “attorney-client privilege” to all e-male subject lines; and
  • Conducting in-person training regularly to ensure these best practices.

-WB

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