The Winds of Investigation Are Blowing in D.C. – Are You Prepared??

March 7, 2014

The winds of investigation are blowing in Washington D.C.

As you all know, in response to the record cold in the eastern United States, natural gas prices soared over the past few months.  While these prices appear to reflect the normal functioning of a competitive market, several federal agencies have begun preliminary investigations into the price changes in the physical and financial natural gas and electric trading markets.

Key Considerations: 

• The first few days of an investigation will set its tone.
• Upon receiving an inquiry from the government, you must take immediate steps to preserve relevant information and halt the routine disposal of documents and electronic data.  Too often such decisions are made too late and crucial information is lost.
• Once an inquiry is received, immediate attention must be given to how this information is communicated within your organization.  A draft public statement should be prepared and a spokesperson identified and briefed on developments in case the inquiry is made public at some point. 
• When responding to an inquiry, it is important to do so forthrightly and quickly.  At the same time, the need to respond quickly is outweighed by the need to be both accurate and thorough. 
• Before fully responding to the inquiry, it may be necessary to conduct an internal review to discover the facts.  One of the biggest mistakes made in responding to inquiries or investigations is not having the facts or failing to double-check them and getting them wrong.  There is almost nothing worse than responding to the government quickly, only to later retract or clarify your statements.
• When responding to an agency’s inquiry, it is also important to be careful to preserve your rights.  The government may seek waivers of the attorney-client privilege or other privileges and protections.  Carefully consider the ramifications of any decision to waive such protections.
• Finally, while the agency may refer to the inquiry as "informal" or a "request for information" rather than an investigation, it still must be taken very seriously.  It is important to know the "rules" of the particular agency and how it treats investigations and enforcement. 

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.