The roles of today’s corporate compliance officer are varied and many. Among other things, corporate compliance officers design or implement internal controls, develop policies and procedures to ensure compliance with numerous laws and establish employee ethics training programs. In addition, most compliance officers find themselves conducting internal investigations based upon complaints, some of which are anonymous. When faced with an anonymous complaint, one might initially think, “It’s an anonymous complaint, why not just ignore it?”
As a threshold matter, an organization has to decide whether to allow employees to submit anonymous complaints. This decision has many critics and supporters. Those who oppose allowing the submission of anonymous complaints argue, among other things, that such a policy reduces the number of frivolous or bad-faith complaints. On the other hand, supporters argue that allowing anonymous complaints to be filed provides employees with an avenue to report misconduct without fear of retaliation.
There are merits to both of these positions. Nevertheless, regardless of the pros and cons of allowing such filings, the reality is that many companies do allow employees to file anonymous complaints and, even if a company does not, an employee may still submit an anonymous complaint. For compliance officers with limited time and resources, deciding whether to investigate a matter themselves or ask outside counsel to investigate can be challenging. Below is information regarding the types of anonymous complaints you might receive and guidance or hints to help you decide whether to investigate, as well as potential consequences of not ignoring such a complaint.
The Vague Anonymous Complaints
There are generally two types of anonymous complaints a compliance officer might encounter. The first is the vague complaint that provides little, if any, valuable information. These complaints are fairly simple to deal with. Examples might include complaints that allege:
- management is violating rules and refuses to take action; or
- a division supervisor is “corrupt” or unethical.
These types of anonymous complaints can be easily resolved because there is little to investigate. In addition, there is usually no corroborating evidence to support the allegations. In each of the above examples, the person who filed the anonymous complaint does not provide the name of the alleged wrongdoer, nor do they identify a specific rule or policy the alleged wrongdoer violated. Thus, without additional information, it would generally be futile to spend time investigating this type of complaint.
The Factual Anonymous Complaint
The second type of anonymous complaint is usually much more fact-intensive and generally includes specific information about the alleged wrongdoing. In addition, this complaint will usually, although not always, be accompanied by corroborating evidence. For example, a factual anonymous complaint might identify persons by name and title and might even cite to a specific rule or policy being violated. These complaints might allege:
- employees at a particular company’s division hire unqualified, politically connected and incompetent people labeled as “staff assistants;” or
- a director (A) recommended the company invest funds in Bank (B) and is receiving consideration from the bank (Bank B) in regard to his or her outstanding personal loans.
There are several things that differentiate the more fact-specific anonymous complaints from others that would not call for an investigation. First, if in reviewing a factual anonymous complaint, the compliance officer determines that the complaint alleges things that if true allege serious wrongdoing, as a compliance officer, you should probably investigate.
Second, in reviewing factual anonymous complaints, the compliance officer should also consider who might have filed such a complaint. For example, if the complaint appears to be the type an employee with “inside” company information may possess, this fact likely increases the veracity of the complaint and might reflect some merit. An anonymous complaint that is factually specific might indicate it was filed by an employee who wishes to expose the misconduct but is fearful of retaliation because the alleged wrongdoer might be a direct supervisor, a co-worker or a high-ranking company official. Although a compliance officer who receives this type of allegation would be unable to interview the person who filed the complaint, the officer should probably still take investigative steps to substantiate (or not) the complaint.
The third, final and perhaps best reason to investigate a factual anonymous complaint might be because as the corporate compliance officer, that is your job and failure to investigate may have consequences for you and your company. If it turns out that you received a factual anonymous complaint that on its face alleged wrongdoing against a high-ranking official and appeared to be filed by someone in the company who had inside information, but you do not investigate, you may find yourself having to justify your non-action. As a compliance officer, you should be aware that an anonymous complaint you received might also have been submitted to other investigatory agencies, such as the local prosecutor’s office, the state inspector general, the U.S. Department of Justice or a member of the news media. If one of these third parties investigates the complaint and discovers wrongdoing, they will likely also discover that you too received the complaint but took no action. As a result, you may find yourself responding to questions about other anonymous complaints you may have received but took no action on. Worse, perhaps you may become the subject of a newly launched investigation, the results of which will likely not be anonymous. So the next time you receive an anonymous complaint, don’t just ignore it.