When the FMA comes a knocking...

Ask him for ID: Rob Everett, chief executive of the Financial Markets Authority. Law firm Bell Gully has published new guidelines about how to act if the authority raids your business.

One of New Zealand's "big three" law firms has written a step-by-step guide of what to do if the Financial Markets Authority comes knocking with a search warrant.

Bell Gully has prepared a note on how to respond if the FMA is trying to execute a search warrant at your premises. The guide was written in January but promoted this week in the firm's Autumn 2014 Financial Services Quarterly.
[Scroll to the bottom of this page for the full document.]

Bell Gully partner Ian Gault told the Herald today that the note wasn't a response to any particular request from clients for advice in this area.

"It just struck us as timely to ensure that clients and others were sort of aware the issue and the process to follow...we'd written similar check-lists, if you like, in relation to other regulators and there wasn't one for the FMA," Gault said.

After advising people facing an FMA raid to ask the lead officer to produce identification and a copy of the search warrant, Bell Gully (unsuprisingly) tells people call a lawyer.

If the lead officer does not produce a valid search warrant, advise him that the search cannot lawfully proceed at that time.

Bell Gully advice on how to deal with an FMA search

But the guide also advises people to check the details of the warrant and has a list of the sorts of things it should contain.

"If the lead officer does not produce a valid search warrant, advise him that the search cannot lawfully proceed at that time," the note says.

It also advises people to deal with the search team "with as little aggression as possible" and to take notes while the investigators are present.

Before the investigators depart, the notice advises requesting a list of what was seized and telling the lead officer of any items for which you want to claim legal privilege.

According to the Financial Markets Authority Act 2011, the regulator may authorise a specified person to "enter and search a place, vehicle, or other thing for the purpose of ascertaining whether a person has engaged in or is engaging in conduct" that breaches any aspect of that particular law.

The FMA must be satisfied there are "reasonable grounds" to suspect a person is engaging in such a breach and that they will find evidence of it where they are searching.

The Bell Gully note says the FMA can seize "anything that is the subject of the search" and use force to carry out the raid, including "entering or breaking open or accessing any area within the place being searched".

Bell Gully says people can be fined up to $300,000 for "intentionally resisting, obstructing, or delaying any person acting under a search warrant".