Regulatory Investigations

Companies today are under more regulations and regulatory scrutiny than ever before. Managing regulatory risk requires a comprehensive, objective assessment of a company’s regulatory compliance, its exposure to enforcement action, and the steps needed to remediate shortcomings.

Kroll provides enterprises in jurisdictions around the world with the facts and insights they need to respond confidently to local and international regulatory issues regarding bribery and corruption, money laundering, sanctions violations and other matters. Our teams include experts in forensic accounting, data analysis, financial investigations, money laundering, fraud and corruption, and cyber security as well as former prosecutors and regulators. This combination of experience and capabilities allows us to bring unparalleled resources and perspective to our work.

Kroll’s engagements are customized so that we can help organizations mitigate risk at each point in the regulatory cycle:

Compliance Review and Remediation

Kroll can evaluate an organization’s current regulatory and compliance practice, identify gaps and make recommendations for remediation so that companies can stay ahead of the shifting regulatory landscape.

Exposure and Response

When a regulatory breach is suspected or discovered, we assist clients and their legal advisors in gathering relevant facts and the extent of the potential problem. Our teams use forensic accounting and data analytics to identify anomalous transactions and reporting irregularities; trace fund flows across jurisdictions and through complex corporate structures; conduct fact-finding interviews; and deploy international investigative research analysts to uncover patterns and relationships. We then work with the company’s legal and regulatory leaders, as well as its outside counsel, to assess the exposure to regulatory action, issues involved in any self-reporting, and steps needed to remediate the situation. When clients decide to self-report, our findings are frequently used as the basis for their communication with regulators; we have presented our findings, alongside external counsel, to various international regulatory agencies.  

Regulatory Agency Support

Because of our experience with regulatory methods and standards, Kroll is often asked to provide specialized support to regulatory agencies in the form of targeted investigations and supervisory reviews of regulated organizations. Regulators in frontier, emerging and established markets rely on us because of our independence and our ability to provide forensic reviews of the highest standard.  

Case Study – Investigating Allegations of Bribery and Corruption

An employee of a U.S.-based multinational infrastructure company alleged that the company had violated FCPA regulations, paying bribes to secure contracts in an African country. The company and its external legal counsel hired Kroll to conduct an internal investigation. 

The year-long investigation included a review of emails and an analysis of 12 years of financial data covering sales contracts awarded in Europe and Africa. We conducted on-site interviews of employees and examined financial and operational documents in several jurisdictions. We also drew upon our extensive network of local contacts to perform background research into companies and individuals that emerged during the investigation as persons or entities of interest.

Kroll assisted the company in preparing materials for the U.S. SEC and the U.S. Department of Justice. We also prepared an assessment, presented to U.S. authorities, of the fines and penalties that could be levied due to the potentially corrupt schemes identified as part of the review. 

Case Study – Investigating Potential FCPA Violations

After a U.S.-based global healthcare company acquired a Chinese subsidiary, the company hired Kroll to examine the subsidiary’s records for evidence of potential FCPA violations, improper payments and anti-corruption issues. 

We began by designing a methodology to identify questionable payments or gifts to Chinese healthcare professionals and to document any evidence of improper or suspicious transactions in the subsidiary’s financial accounting records. Our analysis of data samples from the subsidiary’s ledgers identified numerous potentially high-risk customers and practices, including employee reimbursements, marketing payments, payments to hospitals and medical associations, and payments to non-employee individuals.

In addition to our forensic accounting, we interviewed 30 current and former employees of the company and subsidiary and collected and analyzed data from key custodians’ laptops and electronic media. 

Our investigation and analysis uncovered more than $1 million in cash, gift cards, luxury travel and gifts provided to healthcare and retail sales professionals for six years. Many of these payments were made through a subsidiary’s vendors to disguise the true nature of the payments. Kroll, the company and its counsel presented the investigation findings to the U.S. Department of Justice and the SEC, resulting in a resolution favorable to the company.  

Case Study – Investigating Potential Bid-Rigging and Bribery in a European Multinational Company

A large European multinational engaged Kroll to investigate potential bid-rigging and the paying of bribes. The multinational was eager to establish how widespread awareness of, or involvement in, anti-competitive behavior was across the organization. 

In the investigation, we sent teams to several European and Asian offices of the multinational’s subsidiaries to interview local staff and conduct a high-level analytical review of relevant accounting data. We identified several cases in which bribes were paid and also the individuals possibly involved. We presented our report to the European Commission.

Case Study – Investigation on Behalf of a LIBOR Panel Bank

A Libor, the London inter-bank lending rate, panel bank engaged Kroll to respond to regulatory investigations conducted by the U.S. Department of Justice, the U.S. Commodities and Futures Trading Commission, the UK’s FCA and the European Commission. Tens of millions of internal records and communications were forensically collected and reviewed for submission to each regulator. Kroll worked with the bank’s legal teams to formulate an investigation plan and document review methodology to produce robust and fully evidenced reports and disclosure packs that met the requirements of each regulator and agency.