FBI Expands Its Corporate Fraud Investigations in Response to Recent Chaos in the Financial Markets

September 2008

According to yesterday's reports in the New York Times and other publications, the FBI has expanded its corporate fraud investigations as a result of the recent chaos in the financial markets. Specifically, the FBI has just opened criminal investigations into the activities at Fannie Mae, Freddie Mac and A.I.G., and the collapse of Lehman Brothers. These investigations are likely to involve hedge fund personnel, and touch companies and individuals throughout the financial industry beyond those four companies. Similar investigations are also being conducted by the SEC and New York State Attorney General's office. If any of our clients or their employees are visited by FBI agents or other government investigators, here are five crucial rules that they should follow:

There is no obligation to answer questions, so consider postponing the interview until after the person has had a chance to consult with a white collar criminal attorney.

  • Be respectful, but do not be intimidated.
  • Don't feel the need to talk -- rather, listen carefully to the questions the agent asks.
  • Ask to see official identification, such as a badge or credentials, and obtain the business card of the agent in order to contact him or her in the future.
  • Immediately advise a supervisor, corporate counsel or personal attorney of the encounter and seek his or her advice.

Perhaps the best advice to provide our clients is to immediately retain white collar criminal counsel if they involved in these matters, or think they are likely to become involved in these investigations. As former Assistant U.S. Attorneys with backgrounds in investigations involving financial institutions, we are experienced in advising individuals and corporations who are involved in the types of investigations that the FBI, New York State Attorney General and SEC are now conducting. We are available to meet with or talk to any of our clients who may need our assistance.

For more information please contact:

David Rosenfield at 212.592.1513 or [email protected]

Copyright © 2008 Herrick, Feinstein LLP. The Securities Law & White Collar Alert is published by Herrick, Feinstein LLP for information purposes only. Nothing contained herein is intended to serve as legal advice or counsel or as an opinion of the firm.