Who gets involved
Accounting problems can draw several investigators at once. The company's audit committee often hires outside counsel and forensic accountants to run an internal review. The SEC can bring civil enforcement actions over misstated financial statements, while criminal charges come from the Department of Justice or state prosecutors, and in New York the Attorney General has broad authority under the Martin Act. Auditors, lenders, and private plaintiffs follow their own tracks. The questions usually center on revenue recognition, reserves, and related-party transactions, and on whether anyone knew the numbers were wrong when they signed off, which is a different question from whether the accounting was mistaken.
Company counsel represents the company
When the company's lawyers interview you, they usually begin by explaining that they represent the company, not you, and that the company can decide to share what you say with regulators or prosecutors. That warning matters. Depending on your role, you may want your own lawyer before the interview, and some companies must advance those fees under their bylaws or indemnification agreements. Do not delete, alter, or reorganize emails, spreadsheets, or messages once you know of an investigation, since destroying records can become a separate crime. Keep your own personal messages, but ask counsel before taking any company files home or moving them to personal accounts.
Reporting concerns and retaliation
If you are the person who noticed the problem, the path you take matters. Federal law protects employees of public companies who report securities and accounting violations internally or to regulators, and the SEC runs a whistleblower program with its own filing requirements. Retaliation complaints under some of these laws must be filed within a short window. In a first conversation, we sort out whether you are a witness, a subject, or a potential whistleblower, which records you can lawfully keep, and how to communicate with the company from here. Each of these roles calls for different first steps, and choosing the wrong one early can be hard to undo.
