Legal Commentary

The WSJ law blog has a new story up about a corporate security scandal at Deutche Bank, wherein the Bank's private detectives engaged in a number of acts that, in retrospect, sound either loopy (sending a dead microphone hidden in flowers to the COO to see if he would notice it) or more serious (spying on a board member suspected of leaking information to a journalist).  Similar to the Hewlett Packard pretexting scandal, which I discuss here, Deutche Bank relied on private detectives to do much of its "security work" (although the head of internal corporate security has reportedly left the company in light of the scandal).  As was the case with HP, the Deutche Bank scandal demonstrates some of the problems with corporate -- private -- policing.  The company's internal security apparatus is asked to investigate a problem and then relies on external investigators to do its dirty work.  As a result, the company has to monitor both its internal security and external security to ensure that both ethical and legal norms are met.  This can be extremely difficult when some of the company executives are unfamiliar (as was the case in the HP scenario) with the techniques that the security professionals are using.  

In any event, this all occurred in the past, between 2001-2007, when corporations - and corporate security departments -- had more money to spend. Now, in a world of vastly reduced resources, corporate security (along with corporate compliance) may well get the short shrift.  In this case, reduced resources offers mixed consequences.  On one hand, companies may have fewer resources to identify internal theft and fraud.  On the other hand, it may spell an end to the corporate "surveillance" measures that are, at best, unethical and at worst, plainly illegal.