Justice Department, SEC investigations often rely on companies’ internal probes

According to lawyers and accountants involved in internal investigations, current and former government officials, and records of cases in which internal probes have played a role, the practice is widespread.

For the government, the approach is a way to save money and claim relatively easy victories, corporate lawyers say. For the companies under investigation, it is a way to win credit for cooperating, which can translate into lesser charges or lighter penalties. For the people who conduct the internal investigations — many of them former Justice and SEC employees — it is a big business. An ongoing investigation for Diebold, which makes ATMs, has cost the firm about $16 million, a company spokesman said. Avon has confirmed spending more than $130 million. And a global bribery probe performed for Siemens cost about $950 million, according to a company accounting. That was almost triple the $324 million annual budget of the SEC’s enforcement division when the case was resolved in December 2008.

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