Searches by the Financial Markets Authority
SEARCHES BY THE FINANCIAL MARKETS AUTHORITY
The Financial Markets Authority (FMA) investigates possible breaches of New Zealand’s financial markets legislation (such as the Financial Markets Conduct Act 2013). This note explains what to do if the FMA tries to execute at your premises a search warrant issued under section 29 of the Financial Markets Authority Act 2011.
BEFORE THE SEARCH
- Ask the lead FMA officer for identification, and a copy of the search warrant.
- Advise senior management.
- Seek legal advice (including as to the validity of the search warrant).
- Instruct your team members to co-operate with the FMA officers executing the search. Anyone who resists, obstructs or delays the search could face a fine of up to $300,000.
DURING THE SEARCH
- Try to foster a co-operative working relationship with the FMA officers.
- Bear in mind that the FMA officers may:
- Use reasonable force to carry out the search and any lawful seizure
- Seize any document or thing that is the subject of the search, or may otherwise be lawfully seized (“document” can capture written material, images, computers, mobile phones, USB drives etc)
- Access any computer or other device, or require any person to help them do so
- Take copies of any documents that may be lawfully seized (e.g. by cloning devices)
- Take photographs, sound or video recordings
- However, a search warrant does not permit the FMA officers to:
- Arrest any person, or require them to answer any substantive questions
- Search any area not specified in the search warrant
- Seize any irrelevant or privileged material other than in accordance with conditions set out in the search warrant (e.g. that the material be placed in a sealed envelope pending determination of claims to privilege)
- Assign a team member to assist each of the FMA officers, and take notes (especially in relation to any searching or cloning of computers or other devices).
AFTER THE SEARCH
- Exchange contact details with the lead FMA officer.
- Ask the lead FMA officer to provide an inventory of any documents or other things seized.
- Tell the lead FMA officer which materials you regard as privileged.
- Prepare a note of the events. Mark it “LEGALLY PRIVILEGED AND CONFIDENTIAL”.
- Consider your other obligations (e.g. advise the NZX, contact clients, notify insurers, issue a press release, convene a board meeting, or commence your own investigation).
- Seek legal advice about follow-up steps (e.g. challenge the search warrant, resolve privilege claims, return documents or things seized, or seek further details).