White Collar & Corporate Defence

When the Exposure Is the Business, Not Just a Person

A white collar problem rarely arrives as an arrest. It arrives as a whistleblower complaint, an auditor’s question that does not go away, a regulator’s document demand, or a finance manager who suddenly resigns. Nobody has been charged with anything yet, and the company has to make a series of decisions — who investigates, what gets preserved, what gets reported, who speaks for whom — that will largely determine how the matter ends.

This page is for the business side of that problem: owners, executives, directors, officers, general counsel, boards, and the corporation itself. If you are an individual facing a fraud charge, the offence-by-offence detail is set out on our Fraud & White-Collar Defence page, and we have not repeated it here.

The corporate side is different work. It is usually done before charges, often in parallel with a regulator, and almost always under time pressure created by someone other than a police force — an auditor’s deadline, a lender’s covenant, a filing obligation, a board meeting.

How These Matters Actually Unfold

Parallel criminal and regulatory exposure

One set of facts can generate several proceedings at once, each with its own rules, timelines, and standard of proof:

• A regulatory investigation — securities, occupational health and safety, environmental, tax, or a licensing body — with compelled production and, in some regimes, compelled testimony
• A police or Crown investigation that may result in Criminal Code charges against the company, individuals, or both
• A civil claim or class action by counterparties, investors, or employees
• An insurance or audit process that requires the company to characterize the conduct in writing

These proceedings interact in ways that are easy to get wrong. Material produced to a regulator under compulsion may find its way into a criminal investigation. An admission made to satisfy an auditor may be read back as an admission of liability. A defence filed in the civil case may contradict the position taken with the regulator. Consistency across all of them is a strategy decision, not an administrative one.

The corporation’s interests versus the individual’s

Early in most files everyone assumes they are on the same side. That assumption often does not survive contact with the facts.

A corporation’s interest is usually in demonstrating that any misconduct was the act of an individual, that controls existed, and that the organization responded appropriately. An individual’s interest may be in showing the conduct was authorized, known, tolerated, or directed from above. Both cannot be fully advanced by the same lawyer.

This matters immediately and practically:

• Employees interviewed in an internal investigation must be told, clearly, that company counsel acts for the company and not for them. The company’s privilege belongs to the company, and the company may waive it.
• Directors and officers may have exposure the corporation does not, particularly under statutes imposing personal duties on those who direct the work of others.
• Separate counsel is required as soon as interests diverge — and it is far better to identify that at the outset than to unwind a joint retainer after a conflict has already tainted the record.

We act in both roles: as counsel to the organization, and as independent counsel to an individual director, officer, or employee whose interests need to be advanced separately.

Internal investigations and privilege

An internal investigation is the most powerful tool a company has — and the easiest to run badly. Done properly, it lets the organization find out what happened before a regulator does, fix the problem, and arrive with a credible account and a remediation plan. Done badly, it creates a discoverable file of half-formed conclusions and inconsistent employee statements that becomes the prosecution’s best evidence.

The design choices that matter:

• Who directs it. An investigation directed by counsel, for the dominant purpose of obtaining legal advice or in contemplation of litigation, stands a far better chance of attracting privilege than one run by management or an accounting firm reporting to the CFO. Privilege is easier to lose than to establish, and who directs the work usually determines whether there is any privilege to argue about later.
• How it is documented. Interview notes, draft reports, and email summaries all become part of the record. Structure and labelling matter from day one.
• What is reported and to whom. Distribution of a privileged report to auditors, insurers, lenders, or a regulator can amount to waiver — including as to subject matter. Whether a disclosure made for a narrow purpose can be confined to that purpose is contested ground, and it is not a question to answer for the first time after the report has already gone out.
• Warnings to employees. Anyone interviewed needs to understand, before they answer, that counsel acts for the company — and that warning should be documented.

We set internal investigations up so the findings are usable — to the board, to a regulator, and, if it comes to it, in a courtroom. See Internal & Regulatory Investigations Counsel for how those retainers are structured.

Dealing with auditors and regulators

Auditors are not adversaries, but they are not confidants either. Questions about a contingency, a related-party transaction, or a possible illegal act have to be answered, and the answer becomes part of a file the company does not control. The same is true of a regulator’s information demand: every response narrows the positions available later.

Our role is to get the company to answers that are accurate and consistent with everything else it has said and will say — and to identify where a demand is overbroad, outside scope, or captures privileged material that should be withheld with the basis properly asserted.

Employee misconduct discovered internally

When a company finds the problem itself, it faces a sequence of decisions in a compressed window: suspend or terminate, preserve devices and accounts, notify insurers, notify a regulator if a reporting obligation is triggered, consider a civil recovery action, and decide whether to report to police at all.

Reporting to police is a genuine decision, not a formality. It may be required by contract, insurance, or statute; it also converts an internal problem into a public one, puts company records into an investigative file, and starts a process the company can no longer control. It deserves advice before the decision, not after.

Document preservation and litigation holds

The moment litigation, a prosecution, or a regulatory proceeding is reasonably anticipated, routine deletion has to stop. That means a written litigation hold: identifying custodians and systems, suspending auto-delete and retention policies, preserving email, messaging platforms, phones, laptops, cloud storage, and backups.

Failure here is uniquely damaging. Spoliation — even negligent spoliation through an unchanged retention policy — invites an adverse inference and shifts the case from what happened to what was destroyed. We issue and supervise holds, and we document the process so that the company can later prove it did the right thing.

Reputational and disclosure risk

For a business, the collateral consequences often outweigh the legal ones. Depending on the organization there may be continuous disclosure obligations, lender covenants, insurance notification requirements, procurement and bid eligibility rules, licensing obligations, and customer or franchise agreements with morality or compliance clauses. A public Statement of Allegations or a charge can trigger several of these at once, before any adjudication of the merits.

We build the legal strategy with the disclosure calendar in mind, rather than discovering the conflict after a filing has gone out.

What We Do

• Advise boards, audit committees, and general counsel on emerging investigations
• Conduct and supervise internal investigations under privilege
• Act as independent counsel to directors, officers, and employees where interests diverge
• Respond to regulator and police document demands, production orders, and search warrants
• Prepare witnesses for compelled examinations and police interviews
• Negotiate pre-charge resolutions with regulators and prosecutors
• Issue and supervise litigation holds and manage preservation across systems
• Coordinate parallel criminal, regulatory, civil, and insurance proceedings
• Defend the corporation and individuals at trial and on appeal

Our Approach

1. Establish who the client is, in writing, on day one

Every other decision flows from this. Joint retainers are workable in some files and impossible in others; we say which at the outset and structure the retainer accordingly.

2. Control the record before it is made

Preservation, privilege, and the sequencing of what the company says — to auditors, regulators, insurers, and investigators — are set early. The record made in the first month is the record everyone argues about for the next three years.

3. Resolve it before allegations are issued

Pre-charge advocacy is the highest-value work in this area. A file that closes at the investigative stage leaves no public record, no Statement of Allegations, and no headline. That work is detailed on our Securities & OSC Enforcement page for capital markets matters, and applies equally to other regulators.

4. Separate the individual from the organization — or don’t

Where the company’s best defence is that an individual acted alone, that position needs to be tested against the evidence, not assumed. Where the evidence does not support it, saying so early is better than having a regulator or a co-accused prove it for you.

5. Negotiate from readiness

Negotiating from a position of readiness is the only negotiation worth having. We prepare these files to be tried.

Collateral Consequences

• Licences and registrations — suspension, conditions, or revocation, sometimes on an interim basis before any finding
• Contracts and procurement — debarment from public tenders, loss of supplier or franchise agreements, triggered termination clauses
• Financing — covenant breaches, withdrawn credit, de-risking by financial institutions
• Directors and officers — personal liability, indemnity and D&O coverage disputes, prohibition orders
• Reputation — charges and allegations are public and permanently indexed, whatever the outcome

Related Resources

• Fraud & White-Collar Defence — the criminal fraud offences, elements, and penalties in detail
• Internal & Regulatory Investigations Counsel — pre-charge, internal review, and advisory retainers
• Securities & OSC Enforcement — capital markets investigations and Capital Markets Tribunal proceedings
• Money Laundering & Proceeds of Crime — asset restraint and forfeiture where funds are traced
• Peter Kott — former OSC Enforcement litigation counsel and former federal prosecutor

If your business is facing an investigation, an auditor’s question you cannot answer, or a regulator’s document demand, the decisions made in the first few weeks matter more than anything that follows. Contact Mor Fisher LLP at 705-721-6642 or through our contact page to discuss how the matter should be structured before you respond.