Immediate action – dos and don’ts
Below are some immediate actions to be considered:
- check how many regulatory officials are attending and which regulator they represent
- move the officials to a 'neutral' room that contains no files or computers
- gather an on-site response team. Click here for guidance on how to set up the team
- consider whether you need to contact external counsel. In most dawn raid situations this will be essential
- read the officials’ authority documents carefully to ensure that you understand what documents they are entitled to see. Do not attempt to obstruct the investigators as they conduct the raid, as doing so may: (a) expose the company to fines for obstruction; and (b) impair the company’s ability to seek leniency or immunity, which usually requires a company to have fully cooperated with the authorities
- your basic objective is to protect your organisation's position in the regulatory investigation. You can do this by:
- ensuring officials do not go beyond their authorisation
- protecting legally privileged materials where possible
- avoiding self-incrimination
- not obstructing the inspection - this can result in severe penalties
- taking a detailed record of the inspection and the evidence taken
- gathering information about the officials' concerns
- dealing appropriately with employees, investors, media, and public relations
- starting work early on the defence strategy
The key dos and don'ts are set out below.
DO
- Co-operate
- Comply with the rules
- Scrutinise officials' authority documents
- Consider whether any simultaneous raids are likely to be taking place at other offices (whether in the same jurisdiction or elsewhere in the world)
- Record the officials' actions in detail
- Start thinking about defence strategy and available co-operation/leniency benefits
- Ensure questioning of employees is formal and a written record is taken
- Keep a copy of all documents regulators inspect, take or copy
DON'T
- Be too helpful
- Obstruct the investigation or break any seals placed by officials
- Sign documents without legal advice
- Leave the officials unaccompanied
- Contact competitors about the raid
- Answer questions without a legal adviser present
- Destroy or conceal documents
- Allow the officials to remove or copy legally privileged materials without following the correct protocol for potentially privileged material. At a minimum, if you believe a document to be privileged you should communicate this to the official in question, make clear that the company is not waiving privilege and that its rights to assert privilege over the document are reserved. You may also be able to agree with the officials that any potentially privileged documents are ‘bagged’ – i.e. they are placed into a separate box or envelope which is then sealed and taken away by the regulator but not inspected until the company’s claim to privilege has been properly determined
