Federal Corporate Investigations: Company vs Individual Defense

Your in a conference room. The company's lawyer sits across from you explaining they're conducting an internal investigation into potential regulatory violations. They hand you a document - an Upjohn warning - explaining they represent the company, not you personally, and that everything you say could be shared with the government. You sign it. You answer there questions. You cooperate fully because you've got nothing to hide and because not cooperating would look suspicious. You just made the catastrophic mistake that destroys careers.

Here's what that lawyer didn't tell you. Under Department of Justice policy - specifically the Yates Memorandum and its successor the Monaco Memorandum - your company only receives cooperation credit by giving prosecutors ALL facts about EVERY individual substantially involved in potential misconduct. Not some facts. Not some individuals. All facts about all individuals, regardless of seniority. Cooperation credit is all or nothing. And nothing means the company faces indictment, massive fines, potential destruction of the business. So when the company decides to seek cooperation credit - and they almost always do - there interests and your interests are in direct, irreconcilable conflict. The lawyer who gave you that Upjohn warning isn't protecting you. Their building the prosecution's case against you and calling it an internal investigation.

Spodek Law Group represents executives and employees in federal corporate investigations. Not companies. Executives. Because the moment an investigation begins, the interests of the entity and the interests of individuals inside that entity diverge in ways most people don't see until its too late. Todd Spodek has represented clients who cooperated with internal investigations before understanding what cooperation actually meant - handing prosecutors a roadmap to indict them using their own words.

The Cooperation Credit System That Requires Companies to Indict There Own Executives

The Department of Justice faced political pressure after the 2008 financial crisis. Too many corporate settlements, not enough executives going to prison. So in September 2015, Deputy Attorney General Sally Yates issued a memorandum titled "Individual Accountability for Corporate Wrongdoing." It fundamentally restructured the incentives in every corporate investigation that followed.

The Yates Memo established six principles, but one mattered most: companies seeking cooperation credit must provide the government with all relevent facts about individual misconduct. Not most facts. ALL facts about ALL individuals substantially involved, irrespective of position or seniority. If the company wants any consideration - any reduction in fines, any deferred prosecution agreement, any possibility of avoiding indictment - they have to give up the individuals. Every single one.

Deputy Attorney General Lisa Monaco reinforced this in October 2021. The Monaco Memo doubled down, making clear that companies must be "swift" in voluntarily disclosing violations, "quick" to point fingers at executives, and must produce potentially damning documents "immediately upon discovery." The message was explicit: your cooperation credit depends on how fast and how completely you build the case against your own people.

Here's what this looks like in practice. The company learns the SEC or DOJ has opened an investigation. The company hires a law firm - usually with former prosecutors on staff - to conduct an "internal investigation." That investigation has one primary goal: figure out what happened, who knew about it, and document everything so the company can present findings to the government in exchange for cooperation credit.

The company doesn't investigate to protect employees. They investigate to satisfy DOJ cooperation requirements. And those requirements are clear: identify every individual substantially involved and provide all facts relating to there culpability. If the company refuses, if they hold back even one piece of evidence - they get zero credit. Cooperation is all or nothing. So the company identifies individuals, documents misconduct, turns over interview notes and emails and timelines. They build the prosecution's case.

And the individuals who cooperated with the internal investigation? They just handed prosecutors everything needed to indict them.

In 2024, DOJ charged three Smartmatic executives alongside the company for allegedly paying more than $1 million in bribes. The company cooperated. The executives still got indicted. In 2020, Joseph Sullivan, Uber's Chief Security Officer, was criminally charged with obstruction for allegedly concealing a data breach. Uber cooperated. Sullivan faced prosecution. The pattern repeats: companies seek cooperation credit by providing facts about individuals, and those individuals face criminal charges even when the company gets favorable treatment.

The National Law Review put it bluntly: "Someone - the right someone - has to go under the bus, or the corporation will suffer." If you don't have personal counsel protecting your interests, your the someone going under.

When You Sign an Upjohn Warning, You're Waiving Privilege You Never Had

The Upjohn warning comes from a 1981 Supreme Court case. The Court ruled that attorney-client privilege in a corporate investigation belongs to the corporation, not to individual employees. So when a company lawyer interviews you, anything you say is privileged - but the privilege belongs to the company. The company can waive that privilege anytime and share your statements with the government. You have no say.

Corporate counsel knows this. That's why they give you an Upjohn warning before the interview. The warning states: (1) the attorney represents the company, not you, (2) the conversation is privileged but the company owns it and can waive it without your consent, and (3) you must keep the interview confidential. You sign it. The interview proceeds. Most executives think its just a formality.

Its not a formality. Its a liability waiver.

When you sit down with company counsel and answer questions, your creating a record that the company can hand to prosecutors. Every explanation you give. Every document you produce. Every timeline you clarify. The lawyer sitting across from you is not YOUR lawyer. There client is the company. And if the company decides that cooperating requires turning over your interview notes to DOJ, they will. Your statements become prosecution exhibits, and you cannot claim attorney-client privilege because you never had it. The company did. And they waived it.

The irony is brutal. The Upjohn warning is supposed to protect you by making clear the lawyer doesn't represent you. But most executives hear it, sign it, and cooperate anyway. Why? Because refusing looks suspicious to your employer. Because you believe cooperating shows good faith. Because you think "I have nothing to hide." Because saying "I want my own lawyer" feels like an admission of guilt.

So you cooperate. And the company lawyer documents everything you say.

A 2021 article from Morvillo Abramowitz explained the risk: "Individual employees remain at risk that the company will waive the privilege and share the results of the investigation, including the potentially incriminating statements from employees, with government investigators. Because the company can share your statements with the government and third parties, you can end up facing significant civil or criminal liability."

The New York City Bar Association issued Formal Opinion 2019-4 addressing "pool counsel" - a single lawyer representing multiple individuals in the same investigation. The opinion notes the principal risk is that "divergence of interests will later require the attorney to withdraw." In other words, the lawyer representing you and the company today might have to withdraw tomorrow when your interests conflict. By then, you've already told them everything.

Corporate counsel isn't trying to trick you. They're doing there job. There job is to represent the company's interests. And the company's interest - under the Yates Memo framework - is to gather facts about individuals and present those facts to the government for cooperation credit. The company lawyer who seems friendly, who tells you "just walk me through what happened," who reassures you that "we're all on the same team" - they mean it. You ARE on the same team. Until your not.

And you won't know when that moment happens until its too late.

The Moment the Company Decides to Cooperate Is the Moment Your Lawyer Stops Being Your Lawyer

The DOJ doesn't investigate the company and independently figure out which individuals were involved. They tell the company: you conduct the investigation, you identify the culpable individuals, you provide us with all the facts, and in exchange we'll consider cooperation credit. The internal investigation IS the criminal investigation. The company just does the work for the government.

The Harvard Law Review published an article titled "The Yates Memo: Looking for 'Individual Accountability' in All the Wrong Places" that states under the Yates Memo, "corporate counsel looks more like an agent of the government than defense counsel." That's not hyperbole. That's what happens.

Think about the incentives. The company faces potential indictment. An indictment could destroy the business - remember Arthur Andersen after Enron. The firm collapsed even though the conviction was later overturned. The board has a fiduciary duty to shareholders. Avoiding indictment is existential.

Your a senior executive. Maybe you made decisions that in hindsight look problematic. Maybe you approved conduct that seemed fine but now looks like a violation. The company is deciding whether to seek cooperation credit. Cooperation requires identifying you and providing all facts about what you did.

What does the company choose? The business or you?

The company chooses the business. If that means giving your name to prosecutors along with emails showing your involvement, that's what happens. The Yates Memo makes cooperation all or nothing. Partial cooperation gets you nothing.

The moment the company decides to seek cooperation credit, your interests and the company's interests are irreconcilable. The company lawyer stops representing you - if they ever did - and starts gathering evidence against you. Documenting your involvement. Packaging everything for prosecutors.

And you might not know this decision has been made. The company doesn't email you saying "we've decided to cooperate and we're turning you in." You find out when DOJ sends you a target letter. Or when you get indicted. Or when your personal lawyer reviews the government's evidence and sees your own statements to company counsel being used against you.

Todd Spodek has seen this in case after case. Executives who thought they were cooperating with there employer's investigation. Executives who believed the company was protecting everyone. By the time they hire personal counsel, the company has already turned over interview notes, documents, and a detailed chronology. The lawyer can mitigate the damage, but mitigation is different than prevention.

Increasingly, boards of directors are hiring independent counsel separate from the company's lawyers. Why? Because the board recognizes there interests might conflict with management's interests. If identifying executives for prosecution protects the company, the board wants legal advice that isn't conflicted. An article from Epstein Becker Green notes boards "may find it worthwhile to engage their own counsel as they consider potential action possibly adverse to the personal interests of company executives."

That's the board considering whether to throw you under the bus. And they're hiring independent lawyers to figure out how.

Your CEO probably has personal counsel. The board has independent counsel. The company has its law firm. If you don't have your own lawyer, your the only person without representation. And in a system where cooperation credit requires identifying individuals, being the person without a lawyer means being the person who gets identified.

How Uber's Chief Security Officer Learned the Company Wasn't Protecting Him

Joseph Sullivan was the Chief Security Officer for Uber Technologies. In 2016, Uber suffered a massive data breach - hackers accessed the personal information of approximately 57 million riders and drivers. According to the government, Sullivan tried to conceal the breach from federal investigators.

In August 2020, Sullivan was charged with obstruction of justice and misprision of a felony. The charges alleged he obstructed an ongoing Federal Trade Commission investigation by failing to disclose the 2016 breach. The indictment stated Sullivan arranged for the hackers to be paid $100,000 in Bitcoin, had them sign non-disclosure agreements, and actively concealed the breach from the FTC.

Here's what matters. Uber cooperated with the government's investigation. Uber provided information about Sullivan's conduct. Uber avoided prosecution. Sullivan faced criminal charges.

Sullivan's case went to trial. In October 2022, a jury convicted him on both counts. In May 2023, he was sentenced to three years of probation. The conviction was later overturned on appeal in September 2024, but only after Sullivan had been convicted at trial and sentenced. The point remains: the company Sullivan worked for cooperated with the government, and Sullivan was prosecuted using information the company provided.

Sullivan wasn't a low-level employee. He was the Chief Security Officer, senior leadership. And when the government came looking for someone to charge, Uber gave them Sullivan. The company's cooperation didn't protect him. It exposed him.

The Smartmatic case from 2024 shows the same pattern. DOJ charged three of the company's executives - Roger Alejandro Piñate Martinez, Jorge Miguel Vasquez, and Elie Moreno - alleging they paid more than $1 million in bribes to officials in the Philippines. The company itself was also charged. The company cooperated. The executives still faced indictment.

This keeps happening. Companies cooperate. Executives get charged. The cooperation credit framework requires companies to identify individuals and provide all facts. So companies do exactly that. They identify senior executives. They provide detailed timelines. They turn over emails, presentations, meeting notes. And prosecutors use that information to build cases.

If your an executive and your company is under investigation, you need to understand this pattern. The company's interests and your interests are not aligned. The company will do what it needs to do to survive. If survival requires cooperating with the government and identifying you as responsible for misconduct, that's what will happen. Your position doesn't protect you. Being senior leadership doesn't protect you. Joseph Sullivan was the Chief Security Officer. The Smartmatic executives were senior officers. It didn't matter. When the company decided to cooperate, those individuals were the ones who got named.

Spodek Law Group represents individuals in these exact situations. Executives who thought the company's lawyers were protecting them. Executives who cooperated with internal investigations without personal counsel. Executives who didn't realize the company's cooperation credit depended on giving them up. By the time they come to us, the damage is already done. We work to mitigate consequences, challenge evidence, negotiate with prosecutors. But mitigation is harder and more expensive than prevention.

The time to hire personal counsel is before the internal investigation begins. Not after. Not when you receive a target letter. Not when you get indicted. Before.

Why You Need Personal Counsel Before the Internal Investigation Starts, Not After

You have choices when your company announces an internal investigation. Understanding those consequences is the difference between protecting yourself and handing prosecutors the case against you.

Choice 1: Cooperate without personal counsel.

Most executives do this. Company counsel interviews you. You sign the Upjohn warning. You answer there questions because refusing looks suspicious.

Result: Everything you say gets documented. If the company seeks cooperation credit, your statements get turned over to prosecutors. You cannot claim privilege because the company owned it and waived it. You built the case against yourself.

Choice 2: Refuse to cooperate.

You could tell company lawyers your not comfortable answering questions without your own attorney.

Result: The company views this as non-cooperation. They might terminate you. When they seek cooperation credit, they'll tell prosecutors you refused to cooperate. Prosecutors interpret refusal as consciousness of guilt. You lose your job and become a more attractive target.

Choice 3: Hire personal counsel first.

You hire your own attorney before participating. Your attorney communicates with company lawyers, negotiates terms, and protects your interests.

Result: The company might view you as someone with exposure. But you have protection. Your statements are filtered through counsel who understands the risks. Your not walking into an interview blind.

There's no perfect option. But Choice 3 is the only option that gives you control.

Timing matters. If you wait until after you've been interviewed, its too late. You've already given statements. The company can use them for cooperation credit. A judge will point to the Upjohn warning you signed.

Clients come to Spodek Law Group after they've already talked to company lawyers. After target letters. After indictments. We can defend you, challenge evidence, negotiate with prosecutors. But that's damage control. If you had come before the investigation started, we could have prevented the damage.

Here's what personal counsel does for you:

• Evaluates whether your interests align with the company's interests. Most of the time, they don't. If there's any possibility the company will seek cooperation credit, your interests conflict.
• Advises you on whether to participate in interviews. Sometimes participating makes sense. Sometimes it doesn't. Your lawyer evaluates the specific situation based on YOUR interests, not the company's.
• Negotiates the terms of any cooperation. Maybe you participate only on certain topics. Maybe you provide documents but don't sit for an interview. Maybe your lawyer is present during interviews. These details matter.
• Protects privilege. If you communicate with your personal attorney, those communications are privileged and you control the privilege. The company can't waive it.
• Monitors the company's cooperation decisions. Your lawyer watches what the company is doing. If the company starts moving toward cooperation with the government, your lawyer knows what that means for you and can prepare.

The cost of hiring personal counsel early is significant. White-collar defense attorneys are expensive. But the cost of not hiring counsel is potentially catastrophic. Joseph Sullivan, Uber's Chief Security Officer, presumably had resources. He still got indicted. The Smartmatic executives were senior leaders. They still got charged. Being senior doesn't protect you. Having a good relationship with the company doesn't protect you. Believing you did nothing wrong doesn't protect you.

What protects you is having your own lawyer who represents your interests and nobody else's interests.

If your company announces an internal investigation, call a federal criminal defense attorney immediately. Don't wait to see how serious it is. Don't wait to see if your name comes up. Don't assume the company will protect you. By the time your name comes up, the company has already decided to cooperate, and cooperation means identifying you.

Spodek Law Group handles federal corporate investigations. We represent executives, officers, directors, and employees - not companies. When we take your case, our loyalty is to you. We evaluate your exposure. We advise you on whether to participate in internal interviews. We communicate with company counsel and government attorneys on your behalf. We protect your interests when the company's interests and your interests diverge. Because they will diverge. The Yates Memo and the Monaco Memo ensure it.

Todd Spodek has represented clients in investigations involving the Department of Justice, the Securities and Exchange Commission, the Federal Trade Commission, and other federal agencies. We've seen every version of this pattern - companies cooperating, executives getting indicted, individuals who thought they were protected learning too late that they weren't. The earlier you involve personal counsel, the more options you have. The longer you wait, the fewer options remain.

If your company has announced an internal investigation, if you've received an Upjohn warning, if company lawyers want to interview you - call us before you say anything. We'll evaluate your situation, explain your options, and protect your interests. That's what personal counsel does. And in a system where companies get cooperation credit by identifying individuals, personal counsel is the only protection that actually works.

Contact Spodek Law Group at 212-300-5196. We represent individuals in federal corporate investigations. Not companies. Individuals. Because when the investigation starts, those interests are not aligned.