Responding to Regulatory Investigations 

Australian regulators including ASIC, the ACCC, the ATO and AUSTRAC have extensive investigatory powers, including powers to compel the production of documents, conduct oral examinations, and execute search and seizure activities.  Although Legal Professional Privilege remains available and should be asserted where applicable, the privilege against self-incrimination can be abrogated by statute in this context. 

For General Counsel, three investigative powers come up most often. 

Document production 

This is where a regulator issues a statutory notice compelling the production of specified documents or information by a set deadline. 

General Counsel should check the document production notice carefully. That includes verifying the legal provision under which the regulator is issuing the notice, the scope of documents requested, the method of production and the production deadline. If the deadline cannot be realistically achieved, extensions should be sought in advance. 

A litigation hold should be issued immediately, and all document destruction should be suspended.  

Production needs to be coordinated across the relevant business units, with a core team in charge of the relevance and completeness of the production. Materials subject to Legal Professional Privilege should be quarantined, and privilege should be expressly claimed where applicable. Given that blanket privilege claims are generally not acceptable, the claims need to be specific to the relevant document, communication or category of documents. 

Engaging external counsel to advise on the scope of production and to assist with regulator engagement may help streamline the process. Once production is complete, confirmation should be obtained from the regulator of the documents and information received. 

Compulsory oral examination 

A regulator may require a person to attend an examination, answer questions under oath, and provide information relevant to the investigation. This may occur where the regulator reasonably believes that the person is able to provide information that may assist its investigation. 

General Counsel should first check the notice by verifying the legal provision under which the examination is proposed, as well as the time and location of the examination. 

External counsel should be engaged to prepare for the examination and represent the examinee where appropriate. The examinee should be prepared on the examination process, the likely scope of questions, the right to assert Legal Professional Privilege, and any applicable protections against self-incrimination. After the examination, the transcript should be obtained and reviewed promptly to ensure accuracy. 

Search and seizure 

Regulators may enter premises, usually under warrant, to search for and seize materials, including books and records.  Separately, regulators may have powers to inspect certain documents that are required to be kept under statute. Where appropriate, regulators may give a written notice for the production of documents at the time of the inspection. 

When officers arrive, officers may be guided to a controlled space to minimise disruption, provided that no steps are taken to obstruct or impede the search. General Counsel should check the warrant carefully by verifying that the warrant correctly identifies the source of authority, the premises covered, the scope of the search and the authorised time period. 

General Counsel may ask for external lawyers to attend the premises immediately if that is agreeable.  

A single liaison to accompany officers should be appointed and they should record all actions taken during the search. Where appropriate, privilege over materials should be asserted, and object to out-of-scope seizures without physically obstructing the officers.  

Staff should be instructed not to destroy or conceal any documents, and a detailed receipt of all materials seized or copied should be obtained before the officer leaves. 

The common thread across the three scenarios is preparation – – this includes having documented protocols in place well ahead of time. The decisions General Counsel make in the first hours after a notice arrives, including whether to engage external counsel, whether to issue litigation hold, and whether to assert privilege, tend to be the decisions that shape every subsequent step of the engagement with the regulator.