3 Things You Should Do If a Regulator Asks You for Documents

Let’s start with what you should not do – do not assume that you are required to simply give the government anything it asks for. There are laws and rules that regulators are required to follow in their interactions with businesses they regulate. Many small business owners get nervous when they interact with the government. Government employees often take advantage of your inherent fear of government and the fact that you may not know what is required and what isn’t.

            So, what should you do?

1. First, ask them why. What rule or order are they relying on? They should be able to tell you why they are entitled to the information they’ve requested. If there is no law or rule that they are relying on, then what factually led them to ask you for information? Is an investigation going on? Did they receive a tip or a complaint? You have a right to know whether information you turn over is going to be used against you in some fashion. And if they tell you why they want the information, you might be able to clear things up for them or give them information that is most responsive to the issue that they are investigating.
2. Next, ask them what’s next. After they receive the information, what are they planning to do next? Should you be concerned? Or is this routine information that they need for their files to demonstrate that they are doing the job the law requires them to do?
3. Finally, ask your lawyer. If your interaction with the regulator made you at all uneasy about why the government wants the information or unclear about what’s next, ask your lawyer whether you are required to submit the information, what s/he thinks the government is after, and what will happen if you choose not to provide it.

Remember, you have a right to operate your business. So, you’re not being difficult. You’re just demonstrating that you are savvy. That you understand your rights. That you respect regulators, and you expect them to respect you, too.