Recognizing the shift into defense
Many regulatory matters begin informally, and that is often where the shape of the case is set. An agency asking for documents or interviews may be gathering facts for an enforcement action even if the letter sounds routine. Statements made by staff during an inspection can end up in the agency's file, and in some industries a regulatory matter can lead to a referral for criminal investigation. Whether you are a witness, a subject, or one of many businesses being surveyed changes how you respond. Asking the agency that question through counsel is often appropriate.
Holding on to the right material
Once an inquiry is likely, routine deletion of email and other records relevant to it should be suspended through a written hold. Gather the compliance policies in effect at the time, training records, audit results, and any internal reports about the issue. Avoid creating new summaries or explanations without counsel, since those documents may not be protected. If the agency contacts employees directly, they can be told that they may speak with a lawyer and that the company may provide one, without discouraging them from cooperating. Knowingly giving false information to an investigator is a serious problem of its own, so answers should be careful and accurate rather than quick.
Shaping the response
The first meeting focuses on what the agency appears to be examining, what the facts actually show, and which deadlines are attached. A response that fixes the problem and explains the company's compliance efforts can sometimes narrow the matter or reduce penalties. In other cases the agency's reading of the rule is mistaken, and the defense depends on making that case clearly at the outset. We also look at whether other regulators, customers, or insurers need to be notified, because some contracts and policies require prompt notice. Throughout, we try to keep the matter proportionate to what is really at stake.
