Below are answers to some of the most frequently asked questions relating to FCA investigations.
I’ve received a Notice of Appointment of Investigators from the FCA. What should I do?
Usually accompanied by a Memorandum of Appointment, a Notice of Appointment of Investigators is sent by the FCA to the subject of a criminal or regulatory investigation. The letter sets out why the FCA has opened its investigation and explains the statutory basis for doing so.
The letter does not normally require an immediate response from its recipient. However, it can often be beneficial to their case for the subject to swiftly engage lawyers to liaise with the FCA and advise upon the letter’s content. Any information that is provided to the FCA can be used as evidence in the investigation.
FCA investigations can sometimes start due to a misunderstanding. In such cases, an investigation can sometimes be brought to a swift conclusion with appropriate legal engagement.
Will I be told the FCA is investigating me?
In most cases, the subject of any FCA investigation will be informed of this fact via a Notice of Appointment of Investigators and/or a Memorandum of Appointment letter.
But this is not always the case. The FCA is able to carry out the initial stages of an investigation in secret if it feels that making the subject aware of its actions could potentially prejudice its investigatory abilities.
Depending on the circumstances of the matter, it may be possible for the subject of any active investigation to force the FCA to disclose this fact.
In any case, any individual who is, or suspects they may be, under FCA investigation is advised to seek specialist legal advice as soon as possible.
Can the FCA force me to give an interview or hand over evidence?
The FCA has extensive powers to compel individuals and companies to attend interviews and produce information. It makes frequent use of these powers, both in respect of the subjects of its investigations and also witnesses.
Any individual served with an evidence-gathering or compelled interview request (both of which it can make under the Financial Services and Markets Act 2000) is advised to seek specialist legal advice immediately.
Failing to comply with any such request can result in proceedings for contempt of court for which a prison sentence or fine can be imposed. Engaging with the demands can also pose legal risks: most notably of self-incrimination.
The subject of a compelled interview does not have the right to silence. However, they are permitted to have a lawyer present who can ensure the FCA does not stray beyond its legal powers.
What punishments can the FCA impose?
The subject of FCA enforcement activity faces a variety of penalties if found culpable.
Penalties under the regulatory regime can include public censures, suspensions, restrictions on carrying out business, financial penalties or fines, and/or prohibition from carrying out regulated activities either indefinitely or for a fixed period.
Penalties under the criminal regime include a criminal conviction which may result in a fine or imprisonment, or both and confiscation of assets.
I have received a Request for Information from the FCA. What should I do?
A request (or requirement) for Information is the formal means by which the FCA can compel someone to provide documentation and information to its investigators.
The recipient of an Information Requirement may be the subject of an FCA’s investigation, or a witness. Any individual served with such a request is advised to seek specialist legal advice immediately.
Failing to comply with any such request can result in proceedings for contempt of court for which a prison sentence or fine can be imposed. Engaging with the demands can also pose legal risks: for example of self-incrimination.