'Gradual withdrawals' from fraud and other wrongdoing: guidance for officers and in-house counsel in the whistle-blower era

Upon discovery that employees or third-party agents may be committing a fraud or may be violating anticorruption, export control, trade sanctions, money laundering, environmental, or other laws, corporate officers and in-house counsel might determine that the circumstances allow a gradual withdrawal from the conduct, instead of an immediate termination of the activity. Company officials might be inclined -- as a result of often well-placed feelings of loyalty -- to preserve a long-established business relationship or to help a long-term employee mitigate his or her error by allowing the misconduct to end gradually. Often, the thinking is that this approach will end the problem, avoid detection, and allow the party to repair the damage quietly. In summary, as 2014 unfolds, corporate officers and in-house counsel have more reasons than ever to act decisively to terminate and investigate alleged wrongdoing and, when appropriate, to self-report actual wrongdoing, particularly in the context of government contracting.