Apr 25, 2016
Businesses in the U.S. and Canada are not completely convinced that voluntary disclosure is always the best option. In an article in Financial Post, Julius Melnitzer discusses how choosing this type of legal strategy does not always provide the best outcome for the company. The end result of a recent bribery investigation of Nordion Inc. has sparked more attention on this debate. Osler partner Riyaz Dattu has the same opinion and says, “The facts in this case are very good from the company’s point of view.”
Riyaz goes on to say, “Nordion self-reported in both Canada and the U.S. as soon as it realized it had an issue, then fired Gourevitch and put remedial measures in place.” It appears that self-reporting company wrongdoings can and often does help save the reputation of a business. However, the financial advantages of choosing this strategy are not always ideal. The U.S. Securities and Exchange Commission imposed a fine of $375,000 to Nordion. But, Riyaz says, “The SEC fine pales in comparison to Nordion’s cost of uncovering the behaviour.”
The RCMP did not pursue enforcement, and Riyaz believes that they may have had little choice but to make that decision. “We believe that, while Nordion Canada’s voluntary disclosure and full co-operation may have paved the way for the RCMP closing its investigation, there are legal grounds that explain that decision,” he says. Apparently, the RCMP did not have the same legal option that was available to the SEC when Nordion was charged.
To find out more, read the full article, “Damned if you do, damned if you don't: the perils of self-reporting corporate misdeeds” online at Financial Post, April 19, 2016.