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Abstract: 

Financial institutions are daily under the microscope of myriad government regulators that must supervise our banking system while also seeking to protect the system’s end-users—investors, customers, consumers, and other financial institutions. Indeed, representatives of one or more prudential regulators may be stationed onsite at all times. Although it is important to cooperate with regulators in the context of a supervisory examination (or enforcement investigation), financial institutions must also take care to protect confidential information and records to minimize their risks in the event of parallel enforcement actions and litigation. Navigating strategic decisions while balancing these two sometimes seemingly contradictory objectives—cooperation and confidentiality—can be challenging. The authors discuss means for addressing and preserving certain privileges and other protections that may be available to financial institutions in the context of internal investigations, supervisory examinations, enforcement inquiries, and civil litigation.

Keywords: enforcement action, investigation, prudential regulator, confidentiality, attorney-client privilege, work product privilege, bank examination privilege

Affiliations:  1: K&L Gates LLP; 2: K&L Gates LLP; 3: K&L Gates LLP.