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Regulatory Enforcement and Investigations in Financial Services

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Following the 2008/09 financial crisis the Central Bank was completely restructured. Robust engagement with a credible threat of enforcement became something of a mantra often repeated by the then head of financial regulation.  Although the leadership team at the Central Bank has changed, in the years since its focus on robust engagement and enforcement has not waned.  Indeed in our experience the Central Bank is in many cases stronger in its approach to issues that in even the recent past.  Supervisors are more demanding in the level of rigour and detail they expect of firms – lapses often attract swift regulatory responses which range from strong written warnings to detailed on-site inspections, the issuing of detailed risk mitigation plans (RMPs) the commissioning of independent assurance reviews and of course full administrative sanctions procedures (ASPs).  In the mid-2000’s an ASP might lead to a private warning but now the Central Bank will aim for a public fine in every case.

When the regulator is either in enforcement mode or considering whether to go into that mode particular care needs to be taken.  The interests of the firm which has a right to defend its position, needs to be balanced against a regulatory expectation of being open and honest with the regulator and the legal obligation to act in the best interests of customers. 

Difficult situations need very experienced lawyers with the right skill sets.  Our team is always made up of a combination of (1) technical specialists and (2) litigators.  The former know the rules, practice on the ground and the regulator itself.  The latter, the litigators, know the contentious process and help provide effective strategies to navigate the process.  On the basis that neither has a monopoly on wisdom and we have consistently found that the combination of skill sets improves outcomes for our clients. This might be by helping supervisors to decide not to move a matter to enforcement or to minimise the extent of an ASP if it has already started. In every case a critical objective is to maintaining a good working relationship with the regulator which will remain as regulator after the contentious matter is resolved.

Our Team

Experience Highlights
  • Helping clients across a range of industry sectors from retail banking, corporate banking, insurance, reinsurance, payments, investment services and fund service providers deal with ASPs commenced by the Central Bank.
  • Carrying out an independent review for a large investment firm relating to potential regulatory issues identified by an internal whistleblower with a view to avoiding the regulator commencing a review itself.
  • Carrying out a “Skilled Person Review” for investment firm clients.