Next week I embark on a five-part podcast series sponsored by Hanzo. In the series we will consider how to leverage Artificial Intelligence (AI) in compliance investigations. Our explorations include considering the current Department of Justice (DOJ) guidance on investigations, the use of AI in the Hanzo Investigator, how Hanzo technology can help a company overcome common investigative challenges and Hanzo’s specific approach to finding and managing data across the entire lifecycle of an investigation. The current state of investigations began with two recently released items, the first is the Evaluation of Corporate Compliance Programs, (the “2019 Guidance) and the second is NAVEX Global, Inc.’s 2019 Ethics & Compliance Hotline Benchmark Report (NAVEX Report); focusing on how those two documents provide a guideline for the future of investigations for compliance professionals. The 2019 Guidance provides clear-cut criteria regarding effective compliance investigations. They include:

  • Having the ability to assess the seriousness of allegations, properly scope each report, and determine whether it merits further investigation and data collection;
  • Keeping these investigations “independent, objective, appropriately conducted, and properly documented”;
  • Being mindful of the time it takes to respond to allegations and conduct an investigation and using metrics to measure performance;
  • Collecting, tracking, analyzing, and using the information from the organization’s reporting mechanisms;
  • Receiving funding and budget for reporting and investigation-related mechanisms; and
  • Leveraging this wealth of data to identify any patterns of misconduct and compliance weakness.

Sean Freidlin, Senior Product Marketing Manager at Hanzo, related that compliance teams are failing to promptly substantiate a majority of the reports they investigate, due in part to their inability to quickly and easily find the evidence they need, especially in relation to harassment and misconduct cases. He stated, “This doesn’t just demonstrate a fundamental lack of effectiveness from the DOJ’s perspective, but a long-term organizational risk that goes well beyond any individual allegation of misconduct.” The reason is not simply legal but also operational. If there are substantive allegations that are indeed violations, they could continue, thereby exacerbating the problem(s) but also lengthening the time of legal liability.

Citing to the NAVEX Report he noted, “Allowing a workplace relations matter to fester for 39 days or more could lead to more problems and loss of morale and productivity.” Further, by using  Hanzo for Compliance you “leverage artificial intelligence and machine learning to quickly and easily find and preserve valuable, legally defensible evidence from websites and social media channels so you have a more comprehensive set of data to reach an informed, conclusive decision.” By moving to an AI basted technology and taking a more modern approach to investigation, your investigative protocol can become more robust. The Hanzo technology has been tested, trusted and validated by global law firms, insurance agencies, eDiscovery professionals, regulatory bodies, and government officials. It will allow you to improve substantiation rates, shorten case closure time, and preserve key evidence, which has long been a key regulatory requirement.

Next is how to conduct more conclusive compliance investigations with AI and web-based evidence. In considering investigations which are derived from hotlines and other internal reporting mechanisms, my experience in the legal and compliance field has been traditionally and primarily using internal interviews with employees and company data to help inform the process and reach a conclusion. The types of investigations can be wide-ranging including allegations of misconduct or potential illegal activity, whether it be harassment, fraud, or bribery and corruption. Jim Murphy, VP Products at Hanzo said the company has developed technology that can use unstructured web and social media data to find evidence that helps support that process and, ultimately, conduct more conclusive and efficient investigations.

I asked Murphy to drill down and specify how Hanzo’s Investigator technology works and why its significant to consider this unstructured web and social media data as part of an investigation? Murphy said that for the past decade, Hanzo’s team has been building technology to help legal, eDiscovery, and compliance professionals overcome their challenges around finding, preserving, archiving, and analyzing web and social-media based data.

At the core of the Hanzo Investigator is a technology which Hanzo originally built to archive and preserve websites and social media content. The company was able to combine this with AI and machine learning to accomplish a new, different goal; leveraging the web as a data source to quickly uncover information that can be relevant to an investigation in a legally defensible manner. Since Hanzo introduced this technology, it has proven to be extremely successful with law firms and eDiscovery professionals. Murphy believes that this same approach can be used by compliance investigative teams so they can reap similar benefits.

I asked Murphy if he could explain how the Hanzo Investigator works and, more importantly, how it would facilitate a compliance investigation? Murphy said the “most direct use case is around sexual harassment and misconduct related investigations, but we see the potential for bribery, corruption, fraud, third-party risk, and other similar challenges facing compliance teams too.” He went on to provide examples of (a) how it works today, (b) what the process is like when Hanzo conducts an investigation, and (c) why the web is a powerful data source.

Murphy explained, “Once we find that right subject, Hanzo is able to identify social media profiles and harvest that content off of the web. Once Hanzo has that data, we move into our second pillar here, which is an analysis phase.” This comes through keyword matching. Hanzo is able to look through all of the posts in social media or on the web and pull “out the posts that are or may be relevant to that case, using that keyword matching leads to kind of a filtered set of content and we move into that third pillar of the investigation and that third pillar, that’s where we’re really looking at so we can generate a report.”

All of this is particularly significant in light of the industry research that shows many compliance investigations today are unsubstantiated and can take over 40 days from start to finish. The ability of the Hanzo Investigator to find and analyze data from the web and social media in this automated fashion will be able to overcome some of those challenges both in terms of length of time and overall scope of the investigation.

I was certainly gratified when Murphy brought up the archiving of data as a key benefit of the Hanzo Investigator as this is critical to regulators and prosecutors. Murphy related everything we “do from a preservation perspective in this really is the core of what Hanzo has been over the years.” This allows a company to have confidence their documents and, in turn, can make such representations to regulators and prosecutors that the documents are secure. In other words, Document, Document, and Document.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2019

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