In this episode of Bracewell Sidebar, Chamoil Shipchandler joins hosts Matthew Nielsen and Phil Bezanson to examine government investigations from a prosecutor’s perspective.
Shamoil is a former senior executive with the United States Securities and Exchange Commission and the United States Attorney’s Office for the Eastern District of Texas. He is currently Chief Risk and Regulatory Affairs Advisor at Charles Schwab.
What are the differences between criminal and civil investigations, and how is the government approaching them?
I think of them the same way. You are looking for the same sort of thing. You’re looking for the end result as you try to figure out what went wrong. What went wrong can be criminal. What went wrong can be civil. Sometimes what went wrong can be both. Many of the mechanisms are going to be relatively the same. But at the end of the day, I think the biggest difference would be that a criminal penalty is much harsher. This is the real hammer of the system, as civil sanctions have a lot more flexibility in resolution.
Then there are the investigations launched by the government. Too often you have internal investigations that also turn into government investigations. When you talk about complexity, you have complexity in all kinds of different approaches.
What are the common mistakes that you see happening over and over again in white collar investigations?
When you act as a prosecutor, you look at things from the perspective of the government. One of the key elements of the interface between the private sector and the public sector is for the government to launch an investigation, and they don’t know anything. The reality is, they get information sources that focus on whatever they’re trying to do, but they have no idea. All their requests for upstream information will necessarily be broad. When you have no basis, you need to figure out what you are looking for. I think initially, from a government perspective, it’s really helpful when people get up and say, “Let me help you shape your investigation. I understand what you are looking for.
These are the kinds of things that would help move the ball forward, and to do that, build that trusting relationship and remember that, yes, this is adversarial proceedings, but it doesn’t have to be instantly antagonistic. .
On the business side, on the other hand, it’s important to bring your resources together to answer questions systemically and quickly, while balancing the idea that you’re trying to run business and keep doing business. things that keep the business operational. I think the outlook is different, but really it boils down to this idea of scope and answering questions.
When should you consider bringing in and bringing in outside counsel because of some aspect of the case?
When it emerges during an internal investigation, either it appears not to be an independent investigation or there is sufficient indication that there is something important that requires notice. independent, this is probably where you are referring to an outside lawyer. For example, when I think that if you have people in management who have been identified as people who may have information, it might suggest that you are interviewing an outside lawyer or reviewing information because the topic would be incredibly sensitive. These are the kinds of issues that you think might require self-reporting to the government. You know that the question the government is going to ask itself is whether or not there has been an independent investigation.
If you could foresee this route, you might know that you need to hire a lawyer. In many ways, it’s really a matter of looking at the investigation itself and determining if it is an investigation that could use a truly independent point of view and be able to be carried out at go from there. And many times the legal department is an independent point of view, but there are circumstances where it might not be seen as such.