What you should know before attending an SFC interview (Part 2)
In the first part of our series, we explain some of the matters you should know before attending an SFC interview, including the types of interviews and the powers of the SFC.
In this part, we discuss what may happen in an interview and strategic considerations on what (and what not) to say during an interview.
What may happen during an interview
If someone is asked to attend an interview as a person assisting an investigation, there is usually less need for concern (subject to the qualification that the status may be subject to change later). And if there is a perfectly innocent explanation to any possible misunderstanding, the interview would be a good opportunity to offer it.
However, if someone is asked to attend as a person under investigation (PUI), that means the SFC suspects the person may have committed a contravention against the Securities and Futures Ordinance (SFO), whether as a principal or an accessory. This should be an alarm bell. A PUI attending such an interview without a lawyer and proper legal advice does so at his own risks.
A PUI will most probably be asked to answer questions arising from documents obtained by the SFC during an investigation (e.g. bank statements, Whatsapp messages). If a PUI is suspected to be part of a group of persons suspected to have contravened the SFO, chances are that a number of PUIs and non-PUIs will also be asked to attend interviews for the same investigation. While it is possible that the later in the sequence of interviews a PUI attends during an investigation, the more he will be able to learn about the complete picture of the overall evidence against both him and the other persons, sometimes it is better for a PUI to learn about his PUI status early on so that he can start making the necessary preparation.
What to say and what not to during an interview
There is no right of silence in an SFC interview. It is an offence to fail to answer a question without reasonable excuse during an SFC interview.
It would therefore appear that the only choice for an interviewee in an SFC interview is to tell the whole truth and nothing but the truth. However, it is not that simple .
This may sound surprising, but it is crucial to note that telling the complete truth in an SFC interview may not always be the best option for the interviewee, especially a PUI. Whether it is the best option depends on a lot of variables, including the state of the evidence and the interviewee’s personal circumstances.
A lawyer should never advise his client to lie. However, on the basis that the job of a lawyer is to advise his client on all the possible / probable consequences arising from different options, it should be the client’s choice on which option is best for him.
To give an example, failing to answer a question in an interview without reasonable excuse is an offence with a maximum penalty of a fine of $50,000 and 6 months’ imprisonment under s.184 of the SFO (assuming the case is heard in the Magistrates’ Courts, which it often is). But that assumes there is sufficient evidence for conviction. And even in the event of a conviction, a court rarely sentences a defendant to the maximum sentence for an offence, which is often reserved for the worst possible cases. So the most likely scenario could be a fine, or at worst a very short term of imprisonment.
However, if an interviewee incriminates himself and provides answers which become evidence for some non-criminal proceedings which may then be taken against him, the possible consequences to him could be far more disastrous. For example, in the case of a Market Misconduct Tribunal (MMT) hearing, it may take many years to complete, with huge legal costs along the way. Apart from the possible orders which may be made by the MMT, the psychological toll and the prohibitive costs (both the SFC’s costs and the client’s own legal costs if the SFC’s case in the MMT is established) may be far more unpalatable to most people than what may be expected in a relatively minor criminal case.
But the choice of what to say and what not to during an SFC interview is never binary, but rather a spectrum of possibilities. Furthermore, there is also a huge grey area between being equivocal and less than fully cooperative on the one hand, and outright lying on the other. An experienced lawyer should be consulted on the most suitable strategy, especially in cases where a client is between a rock and a hard place.
Summary
Attending an SFC interview, especially for PUIs, calls for fully informed legal advice, proper planning and a lot of strategic considerations. Interviewees should not under-estimate the grave consequences of not knowing the law and the full ramifications of their answers.
