Final answer:
To safeguard the company from legal exposure, the financial services firm should adopt a policy of conducting complete background and reference checks, obtain candidates' written consent before performing a background check, and conduct an investigation into the employee's situation to determine the appropriate course of action.
Step-by-step explanation:
To safeguard the company from legal exposure in this situation, the company should adopt a policy of conducting complete background and reference checks, including a check of both state and FBI records, going forward. By conducting thorough background checks, the company can identify any potential red flags, such as criminal history, that may pose a risk to the company. This would help mitigate potential legal liabilities and ensure the company makes informed hiring decisions.
Additionally, the company should get all candidates' written consent before performing a background check going forward. This ensures that the company has obtained proper authorization from the candidates to conduct the background check, which is an important legal requirement in many jurisdictions.
Placing the employee on leave and conducting an investigation to determine if the employee should remain employed is also a prudent step to take. The company needs to gather all the necessary information, evaluate the risks, and make an informed decision based on the findings. Taking appropriate actions, such as termination or further disciplinary measures, if warranted, would help safeguard the company's reputation and protect against potential legal claims.