Financial Conduct Authority (FCA) Investigations

Financial Conduct Authority (FCA) Investigations Solicitors

FCA investigations can be extremely stressful, and, without legal assistance, any business that comes under scrutiny by the Financial Conduct Authority runs the risk of financial penalties, loss of reputation and public censure, forced closure, or even prosecution leading to jail time.

If you are concerned that your business may soon be the subject of regulatory investigations or enforcement action by the FCA, you should make contact with the experienced FCA investigation solicitors at DPP Law as soon as possible.

The experts on our team have been providing legal advice and representation to clients accused of financial crime and similar offences for over 30 years.

What is the Financial Conduct Authority (FCA)?

The FCA is a major UK regulatory body, which oversees the operations of financial service providers across the country following a set of Principles for Businesses and their Senior Managers and Certification Regime.

Should a business or any member of a firm’s senior management team be suspected of acting against any of these principles, the company may launch an investigation.

We have produced a more in-depth blog on who the financial conduct authority is.

What Powers Does the FCA Have?

During an investigation, the FCA has the statutory right to request certain information, paperwork, and answers to questions throughout the process. They may also conduct interviews on a voluntary or compulsory basis, or “under caution”.

They may also gain a warrant to enter business premises or residential property in order to collect evidence.

Not only may the body investigate any report of a breach of principles – or an incident of financial crime – but the FCA’s enforcement powers are also wide-ranging.

The body may:

• Withdraw a firm’s operation authorisation
• Order the cessation or suspension of regulated activities
• Issue fines
• Announce enforcement or disciplinary action publicly
• Request the deactivation of websites
• Make announcements warning the public and other businesses of any firms operating on an unauthorised basis
• Apply to the courts for injunctions, insolvency orders, restitution, and other actions
• Prosecute businesses for financial crime and fraud

What Happens During an FCA Investigation?

Any firm that is suspected of financial crime or any other activity that undermines the FCA’s Principles for Businesses will usually receive a Notice of Investigation from the body.

Investigators will then be appointed and a “scoping” discussion or meeting will then be held, wherein representatives of the FCA will explain their process to the party under investigation.

From that point, the body may take a range of approaches, including:

• Interviews of suspected involved parties, colleagues, and witnesses
• Requests for documents and information
• “Dawn raids”, whereby FCA representatives will obtain a warrant to gain entry to relevant locations in order to gather evidence

The findings of the preliminary investigation will then be presented to the parties involved, who may then choose their response.

They may resolve the issues that have been brought to light, contest the FCA’s case against them before the Regulatory Decisions Committee (RDC), or request for the case to be expedited to a tribunal.

If the case cannot be resolved, it will be referred to the RDC, who will then send out a Decision Notice and relevant action will then be taken.

All relevant and appropriate information about the investigation and its outcome will then be published by the FCA.

How Can DPP Law Help During an FCA Investigation?

The enforcement actions and penalties arising from FCA investigations can be severe – and may include the forced suspension or cessation of business operations and even possible jail time following prosecution.

As a result, it is highly important for representatives of any firm facing an investigation by the FCA to get in touch with the specialist solicitors at DPP Law as soon as they can.

Our legal experts will be able to help in the gathering of evidence and information to provide to the investigators and can provide support and advice in interviews under caution or during dawn raids.

We can also aid you in contesting your case before the RDC and will help to build an excellent defence should you be prosecuted in a court of law.

Alongside this, our solicitors advise individuals on:

• Criminal Defence
• Sexual Offences
• Benefit Fraud Defence
• Serious Driving Offences
• Military Law
• Family Law
• Personal Injury
• Road Traffic Accidents

FCA Investigations: Frequently Asked Questions

Q: What should I do if I am subjected to a dawn raid by the FCA?

A: If your business is subject to a dawn raid, you should contact DPP Law on our emergency 24-hour “arrest” line straight away. We will always be available to take your call.

As soon as representatives arrive, you must immediately instruct all employees to cease the routine destruction of any information and paperwork (such as shredding documents).

You should comply with the requests of the FCA – however, by law, they are not permitted to interview your employees, and should only ask factual questions.

Should a dawn raid take place at your premises or residential property, be sure to check that the representatives undertaking said action has possession of the correct warrant.

Q: What happens at an FCA investigatory interview?

A: When called to an FCA interview, it is important to check whether or not the body is invoking its statutory powers. If it has, the interview will not be considered voluntary and you will be in contempt if you fail to attend.

The interview will be led by an FCA investigator, who will check your identity, introduce you to everyone present and explain how the answers to your questions will be used. They will also inform you of the interview’s likely length, including any breaks that are to be taken.

The investigator will arrange for a record of the interview to be made, including the start and end times and the timings of breaks. They will then ask a series of questions – the nature of which will depend on the ongoing investigation.

The investigator retains the power to suspend, terminate or reschedule the interview.

If the interview is voluntary, you are not legally required to answer questions – although the investigator may infer from this that you are purposefully omitting incriminating evidence.

If it is a “compelled” interview, you must answer the questions or explain why you cannot do so.

You may be accompanied to your interview by a legal representative, and we highly recommend that you do so.

Q: What is meant by ‘production of documents in an FCA investigation?

A: This term refers to a notice – usually written – that is given by FCA investigators, requesting that involved parties provide certain pieces of paperwork or information.

Q: Are there any documents I can refuse to disclose to the FCA?

A: If the FCA is exercising its statutory powers, you must produce the documents they have requested. If you fail to do so without a clear and acceptable reason, you will be considered in contempt, and this may be used against you when the case is assessed or if you are prosecuted.

Q: I have received a Notice of Appointment of Investigators from the FCA. What does this mean?

A: This Notice means that you are due to undergo an FCA investigation – and the information contained within will explain that an investigator has been appointed to manage the process. It should also explain the reasons for which you or your firm are being investigated.

Q: I have been asked to attend a scoping meeting. What is this?

A: This is an initial discussion with representatives of the FCA during which they will explain the reason for an investigation into your operations, the likely timeline of that investigation, whether they will be conducting compelled interviews or interviews under caution and any further details of the upcoming process.

You may have legal counsel present. Scoping meetings often provide a good opportunity to ask for clarification or to ask questions in advance of the investigation.

Q: What is an interview under caution by the FCA?

A: If the FCA suspects you of a criminal offence such as money laundering, serious fraud, market abuse, or similar, you may be required to attend an interview under caution. Your legal counsel may accompany you to this.

An interview of this kind echoes the approach of a police interview, whereby you may exercise your right to remain silent (although the consequences of this will also be the same as in police interviews).

If any evidence comes to light during this interview that you may be guilty of a crime, you may be prosecuted.

Q: What penalties can be imposed for criminal offences investigated by the FCA?

A: Because of the wide range of offences that are investigated by the Financial Conduct Authority, many different penalties are possible – from fines and enforced repayments to the suspension or cessation of operations, community order, and even custodial terms.

In cases where the accused is found guilty of fraud, the maximum sentence may reach up to 10 years imprisonment and an unlimited fine.

Q: What is market manipulation?

A: This offence is a form of market abuse whereby the perpetrator takes illegal action to artificially influence the performance of a certain type of asset or security – for example, stocks, shares, bonds, digital currency, or similar.

Q: How does the FCA decide whether to take criminal or regulatory action?

A: The decision between regulatory and criminal action is made by considering the following:

• The severity of – any potential or actual damage caused by – the case of potential misconduct that is being investigated
• Any wider implications that the misconduct may have
• The possibility of exploitation of vulnerable parties
• Public interest
• Evidence of intention or a lack thereof
• Any sign that the investigated party lacks “fitness or propriety”

If you believe that you or your business are to be investigated by the Financial Conduct Authority, do not hesitate to instruct the knowledgeable legal specialists at DPP Law today.

We will discuss the situation with you and determine how we will be able to assist you straight away.