By Darryl Bernstein, Partner, Head of Dispute Resolution, Wian Steyn, Senior Associate and JJ van der Walt, Associate, Baker McKenzie, Johannesburg
There has been an unprecedented acceleration in the global adoption of the virtual office and the COVID-19 pandemic has clarified the fact that many industries already render their services predominantly through electronic means. This accelerated move into the virtual world has implications for the compliance programmes of large and multinational organizations.
Whilst the definitions of fraud and corruption have not changed, the manner in which these criminal offenses are committed, detected and proved, have. This reality is a function of the virtual world within which all businesses now operate. It is no surprise that, in this day and age, records are contained and stored virtually, and, as such, investigations are rarely conducted without industry-standard e-discovery software and platforms that provide flexible and automated workflow capabilities, text analytics and computer‐assisted review, visual data analysis tools and integrated products.
Long gone are the days where hard copy memorandums stored in steel filing cabinets, check counter sheets, and files of paper invoices were the elements of the best documentary evidence for corporate investigations. Recent trends also show a move away from primarily reviewing and analyzing e-mail content to assessing text messages, including those on instant messaging platforms such as WhatsApp and Skype for Business.
Accordingly, a crucial aspect of any corporate investigation relates to the retention and backing-up of data and information, most of which is stored digitally. Without any data, an investigation is essentially limited to what witnesses are able to recall – to the extent that one is able to identify them without underlying data. This is problematic as it is not uncommon for investigations to commence and conclude years after the incident(s) under investigation occurred.
The longer the data retention period, the more effectively one can keep records and, conduct and complete investigations successfully. However, a longer retention period also occasions a higher risk that public authorities and regulators could order or subpoena the production of information in respect of their own investigations or inquiries, even where an unrelated third party is the subject of the investigation. To complicate the issue, certain legislation requires retention of specific information for specified periods. This means that if a shorter retention period is adopted, an entity must segregate data required to be retained for the legislatively imposed period, from data that may be freely deleted.
A virtual world further allows for more in-depth and comprehensive investigations. COVID-19 has shown the power of information and data to qualitatively identify and track trends as well as predict future outcomes. Conducting business in a virtual world means that every act leaves a trace and once that trace is seemingly removed, traces of such traces remain. For example, an e-mail is sent by an author to a recipient or recipients on a specific date and at a specified time. The author and each recipient have an e-mail address and an e-mail is usually ‘signed-off’ with a ‘signature’ containing even more information. We have not even touched on the content of the e-mail or the attachment, which would have its own meta-data.
A further aspect that is encountered in almost all domestic and global corporate investigations is the one of data protection, interception and transfer (especially across borders). This, in many instances, requires the data which has been collected for review to be stored on various servers across the globe or in the cloud. This necessitates close cooperation between various parties and internal and external legal advisors globally, to ensure that the data collection and retention processes take place seamlessly and that the integrity of the data and investigation is not compromised.
There will always be limitations on accessing the personal data of employees, witnesses and third parties, including personal text messages and emails, which may contain key evidence. It is important to balance these limitations with the legitimate requirements of any comprehensive compliance program.
The need to review instant and informal messaging data has also made it increasingly difficult to narrow the scope and filter data by using, for example, tailored search terms. This is because individuals are more likely to make typographical errors and use unofficial word abbreviations and nicknames when using these platforms. This has required compliance and investigation lawyers to adopt innovative methods for reviewing and filtering data, to ensure an effective and comprehensive investigation.
It is evident that corporate investigations have been virtual for many years, in that most of the data scrutinized as part of an investigation is stored in a variety of electronic forms. Further, current interactions with colleagues, witnesses, regulators and authorities often do not take place face-to-face but rather over video conference facilities. This has resulted in corporate investigations running more effectively from a cost and time perspective, as colleagues can more easily collaborate, share knowledge, information and expertise and take advantage of different time zones. This also assists in reducing travel requirements, which are necessary when conducting physical interviews and meetings.
The transition from bricks and mortar to remote investigations presents unique and interesting challenges and the usual practices will need to change. The access and imaging of records will shift away from the exclusive review of specific devices (computers, laptops and mobile devices) and will focus instead on whether data is available and legally accessible on servers and in the cloud. Similarly, interview plans will account for the use of various video conferencing and virtual meeting tools. Interviewers need to be properly trained to use these tools and the additional difficulty of assessing witness credibility in this manner will need to be factored into planning and reporting. Reports and records obtained indirectly from employees will also require an additional layer of verification to ensure accuracy. Finally, investigators should be aware, prudent and perhaps even slightly paranoid about privilege. The ease of information sharing in a virtual interview or remote discussion opens the door to inadvertently waiving privilege.
Virtual investigations require the use of unconventional and cutting-edge electronic solutions, many of which have already been applied with great success and have the potential to produce thorough investigations with beneficial outcomes.