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The FCA wades into the debate on privilege

In a speech on 5 November, the Financial Conduct Authority ("FCA") criticized some firms for letting "legal privilege become an unnecessary barrier" in sharing the output of internal investigations with the FCA. [1] The speech confirmed that the FCA expects firms to share the core product of their investigations - the evidence, which would include witness statements and investigation reports - with it.

This echoes the stance currently taken by the Serious Fraud Office ("SFO"), and highlights the difficulty corporates face in attempting to balance protecting their right to assert privilege against achieving the best outcome possible when liaising with the FCA or SFO in relation to alleged wrongdoing.

By contrast, the Securities and Exchange Commission ("SEC") and the Department of Justice ("DOJ") in the US both have policies prohibiting authorities from even making requests for waivers of privilege except in extraordinary circumstances, and cooperation credit cannot depend upon any privilege waiver or lack thereof. Interestingly, the FCA and SFO position is one that was previously taken by the DOJ and SEC, but from which they retracted following protests from companies. First, the DOJ and, subsequently, the SEC modified their procedures to allow enforcers to request that corporates waive privilege only in specific, extraordinary circumstances.

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