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'Red Flags and Iceberg Tips'
Congress and the Department of Justice (DOJ) are driving home an important point: A company's central management is ultimately responsible for any criminal conduct by its business divisions and employees, and must therefore implement policies and procedures to ensure that it promptly discovers and corrects any potential violations.
The Sarbanes-Oxley Act requires 'up-the-ladder' reporting by and within a company's legal department of suspected violations of law, to ensure that central management becomes aware of material violations and remedies them. See Sarbanes-Oxley Act of 2002, ' 307, Pub. L. No. 107-204, 116 Stat. 745, 784. Meanwhile, the DOJ recently issued 'Principles of Federal Prosecution of Business Organizations.' (Available on the U.S. Department of Justice Web site at http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/title9/crm00162.htm.)
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