In a significant ruling by a federal judge in Manhattan late last week, the actions of a major law firm conducting an internal investigation on behalf of Deutsche Bank AG (“Deutsche Bank”) were deemed “fairly attributable” to the government based on interview requests and direction provided by government actors, including the Commodity Futures Trading Commission (“CFTC”). Although the Court denied the ultimate relief sought by the individual defendant, former Deutsche Bank trader Gavin Black—vacating his conviction on wire fraud and conspiracy charges on the grounds that his Fifth Amendment rights against self-incrimination had been violated during this internal investigation and his subsequent prosecution—the ruling nonetheless has serious consequences for the way companies and counsel interact with government agencies during the course of conducting internal investigations and beyond.
I. Background -
In 2010, as part of a broader probe into LIBOR manipulation by financial services firms, the U.S. Securities and Exchange Commission (“SEC”), CFTC, and Department of Justice (“DOJ”) each began investigating Deutsche Bank. Deutsche Bank retained a law firm as outside counsel to represent it in these LIBOR investigations. As the Court summarized, over the ensuing five years, Deutsche Bank and its counsel “coordinated extensively” with the government, during which time, “the Government was kept abreast of [investigative] developments on a regular basis, and … gave considerable direction to the investigating [outside counsel] attorneys, both about what to do and about how to do it.”
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