Crisis Management

In recent years, problems such as inspection fraud (falsification of inspection data) and falsification of product performance have been discovered in many companies. These problems undermine confidence in the safety and security of products, and may affect a company's ability to survive. They may also have a serious impact on consumers' lives, health and well-being. It is therefore necessary to investigate the facts quickly and respond to customers and regulatory agenciespromptly.

Our firm, led by attorneys with extensive experience in responding to regulators, provides advice and support regarding quality fraud, including internal investigations, responding to regulators, claims for damages from customers, and media and public relations. For independent third-party committees, we conduct factual investigations, analyze causation, advise on and formulate measures to prevent recurrence, and liaise with regulators.

If a listed company or its affiliate is suspected of improper accounting or a material misstatement in a disclosure , it must promptly investigate the facts, determine the impact, and make a disclosure by the deadline specified in the Financial Instruments and Exchange Act. This also applies to companies seeking an IPO when they are audited by an audit corporation.

Our firm has several lawyers with extensive knowledge and experience in accounting fraud, including lawyers with work experience at the SESC and lawyers with CPA certification. In accounting fraud cases, these attorneys take the lead in providing comprehensive legal services as corporate counsel or as members of independent third-party committees. Our work includes support for initial response, factual investigation, analysis of causes, formulation of measures to prevent recurrence, support for dealing with the SESC and stock exchanges, liaison with audit corporations, and the drafting of disclosures and explanations to shareholders and other stakeholders.

Iwata Godo advises clients in employee fraud situations, including embezzlement, kickbacks and defrauding of customers. We have advised clients in such cases on consultation with government agencies, submission of reports, timely disclosure for listed companies, and public relations. We also carry out investigations when clients so request.

If an employee commits a crime, we can prepare for the filing of a criminal complaint and liaise with governmental investigators, and to the extent necessary we can involve a lawyer with prosecutorial experience. Also in such cases, taking into account the psychological state of the accused employee, we can assist the client in communicating with the employee's relatives in order to prevent personal tragedy.

When the facts have been sufficiently understood, we involve a lawyer with expertise in HR issues to assist in disciplinary procedures and bring closure to the matter.

Concerning insider trading, market manipulation and other illegal securities transactions, Iwata Godo advises and assists listed companies both in preventing them and in responding to the situation in the event such a transaction occurs. Our experienced lawyers assist listed companies in strengthening their information management framework. In the event of a violation, we provide advice and support in dealing with the investigations, inspections and other requirements of the SESC, Public Prosecutors Office and stock exchanges, and provide representation in FSA procedures and criminal proceedings. We also advise and assist on disclosures and explanations to shareholders and other stakeholders.

Iwata Godo acts as an external contact point in the whistleblowing systems of many companies, and is very experienced in handling the reports received from employees and other whistleblowers.

A whistleblowing system can be an effective tool to prevent, detect at an early stage, and correct corruption and misconduct, both inside and outside the company. However, in order to fully realize its functions, it is necessary to raise employees' confidence in the system. The Whistleblower Protection Act, which was significantly revised in 2022, requires companies to establish a whistleblowing system.

Our firm not only acts as an external contact point in the whistleblowing system, but also provides services that contribute to enhancing the credibility and ensuring the effectiveness of the system. We support the establishment and operation of the system from a position independent of management with advice on system design, drafting of internal rules, advice for internal response when receiving a whistleblower's report, and advice on investigations and disciplinary actions. We also provide support for promoting internal awareness of the whistleblowing system through training of directors and employees.