In this episode of the 2025 Litigation Forecast Podcast Series, Partner Andrew Horne, is joined by fellow Partner Jane Standage to discuss the intricacies of investigations into companies and individuals by financial service regulators. They delve into the initial steps of an investigation, the powers of various regulators, the obligations and rights of those being investigated, and the importance of legal advice and insurance.
[00:49] Jane provides an overview of the main financial services regulators, including the Financial Markets Authority (FMA), Commerce Commission, Reserve Bank of New Zealand (RBNZ), and Serious Fraud Office (SFO). She explains that while their powers are similar, there are important differences under various acts.
[01:38] The discussion moves to the initial steps of an investigation. Jane explains that it often starts with a statutory notice to provide documents and records, including metadata. These documents are typically submitted through an online file management system.
[01:54] Jane highlights that notices can be addressed to both companies and individuals, often senior executives who may not have been involved in the transaction under investigation. This is to ensure compliance, as failing to comply with the notice is a criminal offence.
[02:22] Jane discusses the broad nature and short timeframes of these notices. She mentions that the FMA is usually open to discussing how the search can be managed sensibly to limit it to what is needed within the required timeframe.
[02:33] Andrew covers the topic of confidentiality orders, which regulators can impose to prevent public disclosure of the investigation. This can be beneficial, especially for listed companies. However, permission may be needed to notify key individuals such as board members and insurers. He also notes that you can always seek legal advice, as confidentiality orders typically allow for this.
[03:47] The conversation shifts to notices requiring interviews, which often follow document requests. These interviews are usually conducted at the regulator's premises, recorded, and transcribed. Andrew emphasises the importance of having a lawyer present during these interviews.
[04:29] Andrew explains that regulators often do not provide advance notice of the questions or documents that will be discussed during the interview. He advises that it is acceptable to state if you cannot recall details due to the passage of time. He also outlines the protections against self-incrimination under various acts, such as the Commerce Commission's Section 47G and the SFO Act's Section 28.
[06:26] Jane discusses the search and surveillance powers of regulators, who can conduct searches without warning. She advises calling your lawyer immediately and requesting that the investigators wait for your lawyer to arrive. She also explains the obligations to assist investigators, including providing access to computers and devices.
[07:17] Jane talks about the protections for privileged documents during searches. She explains that you can inform the regulator about potential privileged information, and the regulator can secure the file or device while the claim is resolved.
[07:42] Jane mentions other important entities, such as private dispute resolution schemes like the banking and insurance ombudsmen. While these are not regulators, they have powers to compel information and can refer matters to the FMA, potentially leading to further investigation.
[08:50] Andrew advises that settling complaints early can prevent them from being referred to regulators. He notes that the jurisdiction of dispute resolution schemes has increased, allowing them to handle more significant disputes.
[09:20] Andrew discusses the importance of notifying insurers about investigations. He explains the coverage provided by statutory liability insurance for firms and Directors & Officers insurance for individuals. He also highlights the need to manage legal representation carefully, especially if there are conflicts of interest.
[10:19] Andrew and Jane wrap up the discussion by emphasising the increasing frequency of statutory notices and the importance of careful and accurate responses. She reminds listeners that misleading the regulator, even unintentionally, can have serious consequences.
Information in this episode is accurate as at the date of recording: Wednesday, 25 June 2025
Please contact Andrew Horne or Jane Standage in our Litigation team if you need legal advice and guidance on any of the topics discussed in this episode.
Please get in touch to receive an episode transcript. Please don’t forget to rate, review or follow MinterEllisonRuddWatts wherever you get your podcasts.
You can sign up to receive updates via your inbox here.
You can read our full Litigation Forecast 2025 here.
