Global Investigations Review - The law and practice of international investigations

Securities & Related Investigations

Last verified on Tuesday 15th November 2016

Korea

Michael S Kim and Robin J Baik
Kobre & Kim
Kwon-Hoe Kim and Myung Soo Lee
Yoon & Yang

    Regulatory environment

  1. 1.What are your country’s primary securities or related law enforcement authorities? 
  2. The Financial Services Commission (FSC) is responsible for setting and enforcing financial and supervisory policy across all financial institutions and markets in Korea. The Securities and Futures Commission (SFC), established under the FSC, deals with matters related to unfair trading on the capital markets, as well as accounting and auditing. The Financial Supervisory Service (FSS) conducts the supervision, inspection and investigation of financial institutions under the guidance and supervision of the FSC or the SFC.

    Self-regulatory organisations, including the Korea Exchange (KRX), the Korea Financial Investment Association (KOFIA), and the Korean Institute of Certified Public Accountants (KICPA), also play a role in the regulatory and supervisory processes.

    The Fair Trade Commission (FTC) has the authority to review the terms of certain financial contracts and to bring actions related to anticompetitive activities, including manipulation.

  3. 2.What are the principal violations or legal issues that the securities or related law enforcement authorities investigate?
  4. A wide array of actions may be brought by the FSC, the SFC, the FSS and other related law enforcement authorities. These violations include, but are not limited to:

    • fraud or unfair trading, including fraudulent or misleading information in public disclosures that are mainly prosecuted under article 178 of the Financial Investment Services and Capital Markets Act (Capital Markets Act);
    • market-price manipulation, which is mainly prosecuted under article 176 of the Capital Markets Act;
    • insider trading and use of material non-public information, which are mainly prosecuted under articles 172 and 174 of the Capital Markets Act, respectively; and
    • failure to report on the status of specific securities owned by the executives or significant shareholders, which is mainly prosecuted under article 173 of the Capital Markets Act.
  5. 3.If there is more than one authority involved in a securities or related investigation, how is jurisdiction allocated? What is the interplay between the securities regulator and the public prosecutor?
  6. The initial investigation is usually conducted by one of the investigation departments of the FSS. The FSS’s investigation of potential violations is typically triggered by (i) anonymous reports made to the FSS, (ii) reference from the KRX, (iii) request of investigation made by the Korea Financial Intelligence Unit (FIU) or the prosecutor, or (iv) through its own course of market monitoring.

    The case is then reviewed and further investigated by the SFC. If the SFC concludes that the suspect is innocent, the SFC can close the case without further action. If not, the SFC refers cases to the prosecutors for further investigation and/or prosecution. The FSS, the FSC and the SFC also support the prosecutors in investigating securities law violations by passing on all the information they gathered in the course of their investigations.

  7. 4.Do the securities or related law enforcement authorities have investigatory powers? Can they bring administrative, civil or criminal proceedings? 
  8. Yes. The FSC, the FSS and the SFC have a broad set of investigatory powers. If the FSC and/or the SFC conclude that the suspect has committed a crime, the FSC and/or the SFC can file a criminal complaint with the Prosecutor General, asking it to investigate the case and indict the suspect. If the FSC and/or the SFC do not find strong evidence to show that there was a violation but believe that the case warrants further investigation, it can expressly request the prosecutors to conduct an investigation. Alternatively, the FSC and/or the SFC may also send investigative materials to the prosecutors without an express request for an investigation.

  9. 5.Are regulatory or criminal securities and related investigations public? Under what circumstances? 
  10. The substance of regulatory and criminal investigations is kept confidential by the relevant authorities until the investigation is resolved, but the fact that there is an investigation may be publicly disclosed by the authority or by the company under investigation pursuant to public disclosure rules or to manage market reaction. 

  11. 6.Are regulatory or criminal securities and related investigations targeted at the company or the individuals involved, or both?
  12. Regulatory or criminal securities and related investigations may be targeted both at the company or the individuals directly involved. 

    Investigation procedure

  13. 7.How do the securities and related law enforcement authorities typically begin an investigation?
  14. Generally, a regulatory authority may begin an investigation based on information from various sources, such as whistleblowers, public complaints, media coverage, examinations or reviews of information by the regulatory authority or referrals from other governmental authorities, and instances of self-reported conduct by companies. 

    The FSC and the FSS receive vast amounts of corporate and market information, such as regulatory filings, as well as ad hoc and regular financial disclosure, and have data on trading and price movements. When the FSC, the SFC or the FSS identifies potential noncompliance or wrongdoing, it will initiate an investigation, usually in the form of requesting information or documents from the companies and individuals implicated.

  15. 8.What level of suspicion of wrongdoing is required for the securities or related law enforcement authorities to begin an investigation?
  16. In general, the FSC and the FSS may exercise their investigatory powers if there are indications that suggest any wrongdoing. They are authorised to initiate investigations at any time as part of their regular supervisory activities.

    Somewhat stricter, the prosecutors may initiate – mostly after a referral from the FSC and/or the FSS – a criminal investigation if there is an initial suspicion. This requires factual indications that a criminal offence was committed. Often, the prosecution will have received all of information that the FSS, the FSC or the SFC collected in the course of its investigation.

  17. 9.May the securities or related law enforcement authorities conduct dawn raids? Does this depend on the nature and seriousness of the allegations?
  18. Under the Capital Markets Act, the FSC has authority to conduct raids. The FSC, however, has rarely exercised this power, leaving that to the prosecutors. The prosecutors may, in the course of a criminal investigation, conduct a dawn raid pursuant to a court-issued warrant. To obtain a search warrant, the prosecutor must apply to the relevant court, upon which the court will consider probable cause, the risk of destruction or tampering of evidence, and the necessity of such evidence.

  19. 10.Must the findings of a company internal review be reported to the securities or related law enforcement authorities? When and under what circumstances?
  20. As part of general compliance obligations, companies are advised to closely investigate cases of actual or potential wrongdoing in cooperation with the financial authorities. There is, however, no specific legal requirement for a company to hand over the report of an internal investigation to the financial authorities. If the findings are of significance, the company should voluntarily disclose them. 

  21. 11.Are whistleblowers a frequent source of information for securities and related investigations? 
  22. Korea’s Act on the Protection of Public Interest Whistleblowers offers legal protection and financial incentives to whistleblowers who report wrongdoing in the private sector in the interest of the public. Whistleblowers are granted anonymity during investigation and court proceedings, in addition to police protection, if deemed necessary.

    In practice, however, there is no guarantee that a whistleblower’s identity will be fully protected. There is still an exceptionally negative perception of whistleblowers. Accordingly, whistleblowing channels, at least to date, are not frequently used, and whistleblowers are therefore not a frequent source of information for securities and related investigations.

  23. 12.Describe the typical phases of a securities or related investigation in your country.
  24. Regulators such as the FSC, the SFC and the FSS usually initiate investigations upon signs of wrongdoing. Once the FSC, the SFC and/or the FSS identifies potential wrongdoing or noncompliance, it typically sends an information request (eg, voluntary production of documents) to the company or individuals involved. It may also summon and question individuals and request information from third parties, including other governmental authorities.

    If the regulators discover what they deem to be a criminal offense, they can either lodge a criminal complaint with the Prosecutor General or refer the case to the prosecutors. In any event, regulators send over information they obtained in the course of their investigation. The prosecutor then conducts its own investigation and, if it concludes that there is enough evidence, it will bring charges.

  25. 13.What are the mechanisms by which a securities or related law enforcement authority may cooperate and coordinate with authorities outside your jurisdiction?
  26. The FSC and the FSS use bilateral and multilateral agreements, such as memoranda of understanding (MOUs) or terms of reference (TORs) to share information with foreign authorities. They are also signatories to the International Organization of Securities Commissions Multilateral Memorandum of Understanding (IOSCO MMoU), which allows securities regulators from around the world to share information. Signatories allow the shared information to be used in civil or administrative proceedings, to pass the information on to SROs and criminal authorities, and to keep shared information confidential. 

    The prosecutors (through the Ministry of Justice and/or Ministry of Foreign Affairs) may also utilise mutual legal assistance treaties, the Council of Europe's Convention on Mutual Assistance in Criminal Matters, and other informal channels to request evidence from foreign countries to facilitate cooperation in cross-border investigations.

  27. 14.Will a securities or related law enforcement authority take into account findings by a law enforcement authority outside your jurisdiction in the course of its investigation?
  28. There is a lot of mutual sharing of information between the FSC/FSS and foreign regulators. The findings by a foreign regulator may generally be taken into account and used by the FSC, the FSS and other domestic regulators. Similarly, the prosecutors may generally use the information provided by the foreign authorities. 

    Document production

  29. 15.What can the securities and related law enforcement authorities require to be produced as part of an investigation? Do the powers of a regulator differ from those of the public prosecutor?
  30. Under the Capital Markets Act, the FSC has broad powers to request a person or company suspected of securities law violations to submit relevant documents, account books, and other materials necessary for the investigation, as well as an affidavit describing factual circumstances involving the conduct at issue.

    The prosecutors may impound or otherwise secure any documents or things, but only after obtaining a court order or a warrant to do so.

  31. 16.Will a litigation hold or will other instruction to preserve documentation need to be issued? When?
  32. Korean law does not impose document-hold obligations on parties that may be facing litigation or prosecution. Companies, however, often have document preservation policies, especially in the context of compliance and enforcement matters. Moreover, individuals who destroy evidence run the risk of committing a criminal offense if their conduct impedes criminal investigations.

  33. 17.Can the securities and related law enforcement authorities request the production of materials protected by attorney-client privilege or work-product doctrine? Can the securities and related law enforcement authorities use protected materials if it obtains them from third parties?
  34. Generally speaking, Korea does not recognise an attorney–client privilege or work–product doctrine, except in very limited circumstances. That said, lawyers are subject to a professional obligation to maintain confidentiality and may refuse to provide documents containing confidential information if it falls within the scope of their professional duties. This protection does not necessarily extend to the client or its in-house counsel, and regulators may request and use these documents from the client companies and individuals. 

  35. 18.How is confidential information or commercially sensitive information treated by the securities and related law enforcement authorities?
  36. Korean public officials, including financial regulators and prosecutors, are subject to a strict confidentiality obligation. For example, the State Public Officials Act provides that all public officials must keep confidential the information they become aware of in the course of carrying out their duties, not only during their tenure, but also after their retirement. Moreover, unauthorised disclosure of commercially sensitive information (eg, trade secrets) may qualify as a criminal offence.

  37. 19.Can the target of a document request exercise a right not to produce?
  38. The recipient of regulators’ voluntary document production request may refuse to comply with such a request. However, such refusals can be subjected to fines or/and other sanctions depending on the circumstances.

  39. 20.Do any data privacy or bank secrecy laws restrict the production of materials to a securities or related law enforcement authority in your jurisdiction? An authority outside your jurisdiction? May the company under investigation provide personal or bank customer data on a voluntary basis?
  40. Korean data privacy laws generally prohibit transfer of personal data to a third party. However, a formal order with a warrant of the court or a formal request made by a financial regulator or the prosecutors may constitute justification recognised by the data privacy laws. 

    Requests or orders from foreign authorities, unless that foreign country has entered into a treaty suggesting otherwise, are not considered sufficient to constitute an exception to the data privacy laws. Foreign authorities often have to rely on formal mechanisms of mutual legal assistance. Korean companies generally do not provide personal or bank customer data on a voluntary basis.

  41. 21.Are there any data privacy, bank secrecy or other laws that restrict where documents or other communications may be stored or reviewed for the investigation?
  42. The companies and individuals are usually required to submit the documents asked for and to communicate with the regulators and the prosecutors under the Capital Markets Act and the Criminal Procedure Act. However, no laws or regulations restrict where documents or other communications may be stored or reviewed for the investigation.

  43. 22.Are the securities and related law enforcement authorities able to obtain documents from outside the country?
  44. Financial regulators can informally and formally request documents from foreign authorities using various informal channels, bilateral and multilateral agreements, MOUs or TORs. Moreover, the FSC and the FSS, as signatories to the IOSCO MMoU, can also request foreign authorities to share important information, including documents.

    The prosecutors (through the Ministry of Justice and/or Ministry of Foreign Affairs) may also utilise mutual legal assistance treaties, the Council of Europe's Convention on Mutual Assistance in Criminal Matters, and other informal channels to request evidence (including documents) from foreign authorities.

    Witness interviews

  45. 23.Will the securities and related law enforcement authorities conduct witness interviews? If so, will the interviews be on the record? Will the interviews be made public?
  46. Korean financial regulators may conduct witness interviews. Under the Capital Markets Act, for example, the FSC and the SFC have the power to summon and question a person of interest to ensure compliance with the act, and such powers are usually delegated to the FSS. Regulators may prepare interview minutes or otherwise record a witness interview. Interviews are not usually made public unless so required in subsequent court proceedings.

    The prosecutors also have the power to summon and question witnesses. Most of these witness interviews will be on the record. Interviews are not usually made public unless so required in subsequent court proceedings. 

  47. 24.Can witnesses exercise a right not to testify? Will any adverse inference be drawn if they do so?
  48. Financial regulators may initially request that witnesses submit to voluntary interviews. While an individual may decline to participate in a voluntary interview, it may be a factor when financial regulators decide to refer the investigation to the prosecutors. Financial regulators, in certain situations, have the power to compel a witness to provide testimony. A witness may exercise his or her right not to incriminate himself or herself. 

    In a formal criminal proceeding, witnesses have a right to refuse testimony only under a narrow set of circumstances, such as a close family relationship to the alleged offender or statutory confidentiality obligations of certain professionals (eg, lawyers, accountants, doctors). Witnesses may also refuse to answer questions if, by doing so, they would incriminate themselves. No adverse inferences may be drawn from the alleged offender’s decision to invoke his or her right not to testify. 

  49. 25.Do witnesses receive separate counsel? Who provides counsel for witnesses?
  50. Generally speaking, corporate executives and employees summoned to testify receive separate counsel owing to potential conflict of interests, at least in high-profile cases. In practice, the company will often make suggestions as to suitable counsel, but the witness ultimately has the final call. The company usually pays or reimburses the legal fees, unless the witness is eventually found liable.

    Advocacy

  51. 26.Can the target of a securities or related investigation challenge the investigation in court while the investigation is ongoing?
  52. No. The target cannot challenge the administrative investigation in court while the investigation is ongoing. However, the court has authority to revoke or overturn investigative authorities’ final disposition if it is based on unlawful or improper investigation. 

  53. 27.What opportunity will there be to respond to a securities or related law enforcement authority’s theories or allegations prior to the authority bringing charges?
  54. Before the FSC determines whether to bring charges, the FSS provides notice to the accused, which includes: (i) title of the charge; (ii) facts that constitute the bases for the charge, details of charge, and legal theory; and (iii) a standard statement that the accused may opine or provide testimony on the matter and the applicable process. According to the notice, the accused can state its opinion and/or position to the FSS in writing.

    Further, in a case in which the Committee for Deliberation on Investigation of Capital Market (Deliberation Committee), which is an advisory organisation to the SFC, determines whether to lodge a criminal complaint, the accused may choose to appear before the Deliberation Committee to state his or her position.

    Also, during the course of the investigation, the accused usually has a number of opportunities to respond to the FSS in writing or in person. These opportunities may be used to effectively respond to the accusation.

  55. 28.What form does the advocacy with a security or related law enforcement authority typically take? 
  56. Advocacy with securities law enforcement authorities typically takes written form, including but not limited to affidavits or opinion letters. As noted above, the accused may also appear before the FSC or the Deliberation Committee to state his or her position.

  57. 29.Are statements or advocacy positions taken by an investigated party during the investigation process deemed admissions and binding in future proceedings? Would such statements be made public?
  58. No. Although the FSC or the FSS typically hands over all related materials when referring the matter to the prosecutors, statements or advocacy positions taken by an investigated party during the investigation are not deemed admissions or otherwise binding in future proceedings unless otherwise qualified under the Criminal Procedure Act. Accordingly, the prosecutors generally interrogate the accused with same questions and materials as the FSC and/or the FSS.

    The investigated party’s statements or positions are not generally made public, but the court may introduce or incorporate such statements or positions as evidence in the final criminal judgment, which is open to the public unless such a disclosure would seriously undermine national security or violate trade secret laws. 

    Timing

  59. 30.What is the limitation period for charges for securities and related violations?
  60. The limitation period for charges for securities and related violations may differ based on the gravity of the violations. Under the Capital Markets Act, the same act can be punished very differently according to the amount of the profit earned from the violation. 

    For violations punishable by fines, the limitation period is five years and, depending on the magnitude of the possible punishment designed for that violation, the limitation period can be up to 15 years. 

  61. 31.When does the limitation period begin to run?
  62. The limitation period begins to run when the act that constitutes the violation occurs. If the violation includes an accomplice, the limitation period begins to run when all acts of the accomplice are done.

  63. 32.What can suspend the running of the limitation period? Can the securities and related law enforcement authorities request a tolling agreement?
  64. The limitation period may be suspended for a number of grounds. For example, if the prosecution files a charge with the court or if the suspect flees the country for the purpose of avoiding criminal penalties, the limitation period is suspended. Korean securities and law enforcement authorities do not have power to enter into tolling agreement.

  65. 33.How long does a securities or related investigation typically take?
  66. It varies, but it typically takes more than a year. For example, in an unfair trading case, the FSS handles preliminary investigation, and, once done, the Deliberation Committee decides whether to refer to the prosecutors. The prosecutors then perform their own investigation, followed by trial.

    Resolution

  67. 34.What is the process for closing an investigation if the investigation does not reveal a violation of securities or related laws? Will the securities or related law enforcement authorities provide written confirmation that the investigation is closed without action?
  68. If the investigation does not reveal a violation of securities or related laws, the financial regulators, such as the FSS, simply do not take additional measures. 

    The prosecutor’s office generally provides a written notice that it will not initiate prosecution.

  69. 35.How will the resolution or settlement process be initiated?
  70. There is no explicit resolution or settlement process set forth in the Capital Markets Act or other relevant laws. Unless provided otherwise, the investigation usually takes its due course and is resolved accordingly. However, during the course of the investigation, the accused may provide reasonable explanations to the accusation and the FSS may decide not to further investigate at its discretion.

  71. 36.Who decides whether to proceed with charges and what charges to select? 
  72. In a typical investigation, the FSS submits a report to the FSC that sets forth facts, alleged illegal activity, and the FSS’s recommendation regarding the charges. The Deliberation Committee deliberates the case and decides whether to file a criminal complaint with the Prosecutor General or refer the case to the prosecutors or both. If applicable, it also decides whether to impose administrative fines, issue warnings, or take corrective measures.

  73. 37.What factors would a securities or related law enforcement authority consider in selecting charges and the severity of any penalty or fine?
  74. The securities or related law enforcement authorities, including the FSC and the SFC, and ultimately the court, have discretion in selecting the charge and the severity of penalty or fine pursuant to applicable laws. In exercising such discretion, they consider many factors, including intent and magnitude of the violation, whether the violation was voluntarily reported to the authorities, whether the violation has been remedied, precedents involving similar violations and associated penalties, and the impact that such charges and penalties might have on the market in the future. The factors to be considered may vary from case to case.

  75. 38.What remedies can the securities or related law enforcement authorities consider? How are penalties calculated?
  76. The FSC or the SFC may consider a wide array of remedies, including but not limited to filing a criminal complaint with the Prosecutor General, imposing administrative fines, taking corrective measures, issuing warnings, and ordering removal from office for those involved in illegal practices.

    Criminal penalties are calculated according to the Capital Markets Act and other related laws. 

  77. 39.Do illegal profits have to be disgorged, and if so, how are they determined?
  78. The Capital Markets Act provides that, when found guilty of violations such as using material non-public information, market manipulation, and unfair trading, illegally acquired property shall be confiscated and, when the property cannot be confiscated, the equivalent value thereof will be collected according to the criminal trial procedure. 

  79. 40.Can criminal charges be brought against companies in your jurisdiction for violations of securities and related laws?
  80. The Capital Markets Act provides that, when found guilty of violations, companies can be criminally prosecuted and punished by fine for its negligence in supervision.

  81. 41.Will the securities and related law enforcement authorities provide a reduced penalty for cooperation? What standard will the authority use when taking into account any cooperation?
  82. Cooperation can lead to a reduced penalty or, in some cases, avoidance of a criminal complaint altogether. This is particularly true when (i) the investigated party is not a primary suspect, has no record of securities law violations, and voluntarily reports criminal activity; or (ii) the investigated party is not a primary suspect and provides critically important information with respect to unfair trading allegations.

  83. 42.Are deferred prosecution agreements or non-prosecution agreements permitted?
  84. No. They are not permitted.

  85. 43.Will a court need to approve the settlement agreement with a securities or related law enforcement authority?
  86. Settlement agreements with the FSC, the SFC, the FSS or the prosecutors are not permitted in Korea.

  87. 44.If a settlement occurs, will an admission to certain facts or wrongdoing be required?
  88. Settlement agreements with the FSC, the SFC, the FSS or the prosecutors are not permitted in Korea.

  89. 45.Can the findings or decisions of the securities or related law enforcement authorities be administratively appealed? Appealed to a court?
  90. An investigated party who is dissatisfied with a disposition of the FSC or the SFC may file an objection with the FSC within 30 days of the disposition. Also, an investigated party can appeal to court within 90 days of the disposition. 

  91. 46.If a decision can be administratively or judicially appealed, what are the consequences of an adverse decision on appeal? What are the consequences of a positive decision on appeal? 
  92. If an investigated party objects to the FSC or the SFC, the adverse decision on appeal binds the FSC or the SFC, and the case may be remanded or dismissed.

    On the other hand, if the investigated party appeals to the administrative court and gets an adverse decision on appeal, that decision is usually to revoke the decision made by the FSC or the SFC, and the case is usually remanded for further proceedings. The FSC or the SFC is bound to the court’s decision and may not come to the same decision as the previous one. 

    Collateral consequences

  93. 47.What are some of the collateral consequences to a resolution or settlement with a securities or related law enforcement authority? 
  94. There is no explicit resolution or settlement process set forth in the Capital Markets Act or other relevant laws.

    The implicit collateral consequences can be a few, but, most noticeably, the violators may not qualify for large shareholder requirements for the financial companies or be appointed as the executives of those companies for a certain period.

  95. 48.What are some of the collateral consequences to a conviction or the imposition of liability by a court?
  96. The implicit collateral consequences can be a few, but, most noticeably, the violators may not qualify for large shareholder requirements for the financial companies or be appointed as the executives of those companies for a certain period.

  97. 49.Can private securities or related legal claims proceed parallel to investigations by securities and related law enforcement authorities?
  98. A person damaged by unfair trading activities (eg, use of material non-public information) may bring a civil action for damages against the perpetrator. However, it is not practical to proceed with the civil actions parallel to investigations by financial regulators such as the FSS. This is because US-type discovery is not permitted in civil lawsuits, and the plaintiff may face difficulties in acquiring the evidence necessary to establish liability until the FSS and the FSC conclude their investigation.

  99. 50.What effect will findings by an authority in another jurisdiction have in private proceedings?
  100. There is no particular restriction on admission of evidence in private proceedings. Any adverse findings by a foreign authority can be submitted to the court, which may take the adverse finding into consideration in favour of the plaintiff.

  101. 51.Can private plaintiffs obtain access to the files or documents the securities or related law enforcement authorities collected during the investigation?
  102. Private plaintiffs do not have access to the files or documents collected by the FSS or related authorities. Public authorities, including the FSC, the FSS and the prosecutor’s office, may decline to disclose information pertaining to audit, supervision, regulation, and investigation of crime or prosecution under the Official Information Disclosure Act. However, the private plaintiff may ask the court for the order to submit the related documents to the extent permitted under relevant laws.

     

    ** This article was written as a collaborative project between Yoon & Yang and Kobre & Kim. Yoon & Yang contributed summaries of Korean law. Kobre & Kim LLP contributed thoughts on international legal issues arising in cross-border investigations and regulatory enforcement matters involving Korea.

Interested in contributing to this Know-how?

E-mail our Co-Publishing Manager


GIR Know-how is published free-to-view to give practitioners quick answers to important questions in cross-border investigations and compare law and practice across jurisdictions. If your country isn’t featured or you have feedback to share, please email Edward Perugia to find out more.

Questions

    Regulatory environment

  1. 1.What are your country’s primary securities or related law enforcement authorities? 
  2. 2.What are the principal violations or legal issues that the securities or related law enforcement authorities investigate?
  3. 3.If there is more than one authority involved in a securities or related investigation, how is jurisdiction allocated? What is the interplay between the securities regulator and the public prosecutor?
  4. 4.Do the securities or related law enforcement authorities have investigatory powers? Can they bring administrative, civil or criminal proceedings? 
  5. 5.Are regulatory or criminal securities and related investigations public? Under what circumstances? 
  6. 6.Are regulatory or criminal securities and related investigations targeted at the company or the individuals involved, or both?
  7. Investigation procedure

  8. 7.How do the securities and related law enforcement authorities typically begin an investigation?
  9. 8.What level of suspicion of wrongdoing is required for the securities or related law enforcement authorities to begin an investigation?
  10. 9.May the securities or related law enforcement authorities conduct dawn raids? Does this depend on the nature and seriousness of the allegations?
  11. 10.Must the findings of a company internal review be reported to the securities or related law enforcement authorities? When and under what circumstances?
  12. 11.Are whistleblowers a frequent source of information for securities and related investigations? 
  13. 12.Describe the typical phases of a securities or related investigation in your country.
  14. 13.What are the mechanisms by which a securities or related law enforcement authority may cooperate and coordinate with authorities outside your jurisdiction?
  15. 14.Will a securities or related law enforcement authority take into account findings by a law enforcement authority outside your jurisdiction in the course of its investigation?
  16. Document production

  17. 15.What can the securities and related law enforcement authorities require to be produced as part of an investigation? Do the powers of a regulator differ from those of the public prosecutor?
  18. 16.Will a litigation hold or will other instruction to preserve documentation need to be issued? When?
  19. 17.Can the securities and related law enforcement authorities request the production of materials protected by attorney-client privilege or work-product doctrine? Can the securities and related law enforcement authorities use protected materials if it obtains them from third parties?
  20. 18.How is confidential information or commercially sensitive information treated by the securities and related law enforcement authorities?
  21. 19.Can the target of a document request exercise a right not to produce?
  22. 20.Do any data privacy or bank secrecy laws restrict the production of materials to a securities or related law enforcement authority in your jurisdiction? An authority outside your jurisdiction? May the company under investigation provide personal or bank customer data on a voluntary basis?
  23. 21.Are there any data privacy, bank secrecy or other laws that restrict where documents or other communications may be stored or reviewed for the investigation?
  24. 22.Are the securities and related law enforcement authorities able to obtain documents from outside the country?
  25. Witness interviews

  26. 23.Will the securities and related law enforcement authorities conduct witness interviews? If so, will the interviews be on the record? Will the interviews be made public?
  27. 24.Can witnesses exercise a right not to testify? Will any adverse inference be drawn if they do so?
  28. 25.Do witnesses receive separate counsel? Who provides counsel for witnesses?
  29. Advocacy

  30. 26.Can the target of a securities or related investigation challenge the investigation in court while the investigation is ongoing?
  31. 27.What opportunity will there be to respond to a securities or related law enforcement authority’s theories or allegations prior to the authority bringing charges?
  32. 28.What form does the advocacy with a security or related law enforcement authority typically take? 
  33. 29.Are statements or advocacy positions taken by an investigated party during the investigation process deemed admissions and binding in future proceedings? Would such statements be made public?
  34. Timing

  35. 30.What is the limitation period for charges for securities and related violations?
  36. 31.When does the limitation period begin to run?
  37. 32.What can suspend the running of the limitation period? Can the securities and related law enforcement authorities request a tolling agreement?
  38. 33.How long does a securities or related investigation typically take?
  39. Resolution

  40. 34.What is the process for closing an investigation if the investigation does not reveal a violation of securities or related laws? Will the securities or related law enforcement authorities provide written confirmation that the investigation is closed without action?
  41. 35.How will the resolution or settlement process be initiated?
  42. 36.Who decides whether to proceed with charges and what charges to select? 
  43. 37.What factors would a securities or related law enforcement authority consider in selecting charges and the severity of any penalty or fine?
  44. 38.What remedies can the securities or related law enforcement authorities consider? How are penalties calculated?
  45. 39.Do illegal profits have to be disgorged, and if so, how are they determined?
  46. 40.Can criminal charges be brought against companies in your jurisdiction for violations of securities and related laws?
  47. 41.Will the securities and related law enforcement authorities provide a reduced penalty for cooperation? What standard will the authority use when taking into account any cooperation?
  48. 42.Are deferred prosecution agreements or non-prosecution agreements permitted?
  49. 43.Will a court need to approve the settlement agreement with a securities or related law enforcement authority?
  50. 44.If a settlement occurs, will an admission to certain facts or wrongdoing be required?
  51. 45.Can the findings or decisions of the securities or related law enforcement authorities be administratively appealed? Appealed to a court?
  52. 46.If a decision can be administratively or judicially appealed, what are the consequences of an adverse decision on appeal? What are the consequences of a positive decision on appeal? 
  53. Collateral consequences

  54. 47.What are some of the collateral consequences to a resolution or settlement with a securities or related law enforcement authority? 
  55. 48.What are some of the collateral consequences to a conviction or the imposition of liability by a court?
  56. 49.Can private securities or related legal claims proceed parallel to investigations by securities and related law enforcement authorities?
  57. 50.What effect will findings by an authority in another jurisdiction have in private proceedings?
  58. 51.Can private plaintiffs obtain access to the files or documents the securities or related law enforcement authorities collected during the investigation?