The recent courtroom battle over the admissibility in a criminal trial of statements made by former Deutsche Bank AG traders to Deutsche Bank’s outside counsel during its internal investigation into misconduct involving the London Interbank Offered Rate, or Libor, shines a spotlight on a potentially recurring problem in criminal prosecutions that arise out of or rely on evidence gathered during internal investigations — excessive entanglement between company counsel and government regulators conducting parallel investigations. The problem? The Constitution. Indeed, government entanglement in or direction of an internal investigation can lead a court to conclude that company counsel acted on behalf of the government, subjecting its otherwise private investigative activity to constitutional scrutiny.

Others have written on the specific problem that arose in the Deutsche Bank Libor-manipulation trial and lessons learned from that particular situation, in which the parties litigated whether company counsel’s allegedly coerced interviews violated the Fifth Amendment. But this article focuses more broadly on the host of “state action” problems that can arise when excessive entanglement exists between government lawyers and company counsel who are conducting an internal investigation, and provides some practical tips for how to avoid those problems.

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