Internal and Audit Committee Investigations

Audit committees have been propelled to center stage with the enactment of Sarbanes-Oxley, high-profile NYSE and NASD listing requirements as well as a handful of highly publicized accounting scandals. Now, more than ever, audit committees are being asked to oversee and investigate a wide spectrum of issues relating to a company's financial reporting, public disclosures and internal controls. These investigations frequently involve the possibility of crippling financial restatement and must be conducted against the backdrop of securities class actions, regulatory scrutiny and the specter of criminal prosecution.

We bring insight, value and efficiency to the internal investigation process by:

• knowing how to design and organize the investigation upfront;
• understanding the legal, regulatory and litigation environment in which the investigation occurs;
• understanding the duties of public companies, audit committees and boards of directors;
• protecting privileges;
• avoiding missteps that can produce collateral damage in subsequent proceedings;
• knowing how to gather and analyze the relevant evidence quickly and efficiently; and
• maximizing the value of forensic accountants, private investigators, and other experts.

Our litigators understand that audit committee investigations must get to the bottom of the problems being investigated, wherever the trail might lead. We also understand that restatements and precipitous corporate actions can have dire consequences. In many cases, our securities and white collar criminal litigators are able to develop the relevant facts and then work closely with the company's outside auditors to avoid a restatement or minimize its impact.

Internal Investigations

Clients look to Orrick when they need an internal investigation. With each investigation our team includes lawyers, including those with prior civil and criminal enforcement experience, who have a broad knowledge of corporate governance, governmental regulation, accounting rules, corporate structure/finance and legal duties. More importantly, we bring the strategic judgment and experience to know what and when steps should and should not be taken to provide sound advice to all concerned. These investigations have addressed a broad spectrum of matters, including:

• Financial reporting
• Accounting improprieties
• Insider trading
• IPO allocation practices
• Regulation FD compliance
• Broker-dealer compliance
• Internal controls
• Market timing and late trading
• Diversion of corporate funds
• SEC compliance

By tapping into our expertise, experience and insight, clients minimize the formidable litigation, regulatory and criminal risks posed by investigations, and thereby preserve their companies' public standing.

Selected Publicly Disclosed Board Committee Representations and Internal Investigations

Many of our board committee representations and internal investigations remain confidential. The group has conducted internal investigations and represented special committees and audit committees for the following clients that are now public:

• Accelerated Networks Inc.
• Azure Capital Partners
• Calypte Biomedical
• Gap Inc.
• Harper Group
• Intraware
• Legato Systems
• Onyx Software
• Restoration Hardware
• Salomon Smith Barney
• Versata Inc.
• Walt Disney Co.
• Wells Fargo Bank