Understanding how a potential investigation involving your client comes to the attention of a state attorney general and what range of considerations the AG may apply in evaluating the case is essential in assisting those who may face AG scrutiny. Although AGs have wide latitude and discretion, the public impact of allegations, the origin of the complaint and the issues it concerns may well play a role in their determining whether, and even when, they initiate enforcement actions.
Many AGs take a proactive approach, affirmatively seeking matters that deserve scrutiny. When doing so, an AG may follow enforcement actions being pursued by federal partners, such as the U.S. Securities and Exchange Commission, the Federal Trade Commission, the Consumer Financial Protection Bureau or the Federal Communications Commission, to name a few. These are often the largest investigations conducted by an AG’s office, and can also be some of the most impactful on clients. From time to time, an AG may also take note of a significant matter that has occurred in another country and decide to probe the potential local effect of the unlawful conduct. The fraudulent manipulation of the LIBOR interest rate, investigated by a number of state AGs several years ago, comes to mind.
