Criminal Defense Lawyers

Can I Ignore an SEC Subpoena? The Consequences Are Worse Than You Think

When Anthony Coronati decided to ignore his SEC subpoena back in 2013, he probaly thought the problem might just go away on its own. Maybe the SEC would lose interest or move on to bigger targets. Instead what happened was U.S. Marshals showed up and arrested him. He found himself facing a $50,000 bond just to get released and couldn’t travel outside certain districts in New York. His attempt to make the problem disapear by ignoring it turned into a nightmare that became permanant public record.

If your sitting there right now with an SEC subpoena in your hands wondering if you can just… not respond, I understand why your tempted. The document requests feel absolutley overwhelming, theres pages and pages of legal jargon that doesnt make sense, and maybe theres a part of you hoping this whole thing will blow over if you just wait long enought. I’ve seen this reaction from clients more times than I can count over the years.

But heres the thing – it wont blow over. Ignoring an SEC subpoena is genuinely one of the worst decisions you can make in this situaton. The consequences escalate fast and they dont stop untill you comply or end up in handcuffs. Let me walk you through exactly what happens when people try to ignore these things, because I think once you understand the full picture you’ll see why responding properly – even if its intimidating – is always the better path.

No, You Absolutley Cannot Ignore an SEC Subpoena

Lets get the bottom line out of the way first – no, you cannot ignore an SEC subpoena, and anyone who tells you otherwise is giving you dangerously bad advice. The SEC has full subpoena power under 15 U.S.C. § 78u(c) which gives them the same authority as federal courts to compel testimony and document producton.

This isnt like getting a letter from some random company asking for information that you can toss in the trash. An SEC subpoena carries the full weight of the federal goverment behind it. When they issue one they have every intention of enforceing it, and they have all the tools necesary to do exactly that.

In 2024 alone the SEC recieved over 24,000 whistleblower tips. Thats 24,000 potential investigatons getting launched, 24,000 situations where someone might end up holding one of these subpoenas. The enforcement division isnt some small operation thats going to forget about you – they have the resources and the mandate to pursue every single case they open.

The other thing people dont realize is that right now, your investigation is probaly private. The SEC conducts there investigations confidentially. Your employer might not know whats going on, your clients definately dont know, and nobody is googling your name and finding SEC enforcement actions. But the moment you ignore a subpoena? That privacy disapears completley. More on that later – its a bigger deal than most people understand.

I had a client a few years ago who thought maybe the subpoena wasnt “official” enough to worry about. He figured if they really meant business theyd send something more intimidateing. Thats not how this works. Every SEC subpoena is serious whether it comes by mail or hand delivery, whether its requesting a few documents or thousands of them. The legal consequnces for ignoring any of them are identical.

The Enforcement Timeline: What Happens After You Ignore

People often ask me what actually happens if they dont respond. They want to know the timeline, the specific steps, what triggers what. So let me lay it out for you in detail because understanding this progression might be what convinces you that compliance really is the only sensable option here.

Days 1 through 14: The Clock Starts

You recieve the subpoena. At this point you have a specified deadline for compliance – usually 14 to 30 days depending on what there asking for. You also have a 14-day window to file formal written objections if you believe the subpoena is somehow improper. If you do absolutley nothing during this period your already creating problems for yourself because your waiving your right to formally object.

Days 15 through 30: Follow Up Attempts

SEC staff will typically try to reach you. Phone calls, emails, maybe another letter. Theyre giving you chances to comply or atleast explain whats going on. If your ignoring these contacts too, your building a record that shows willful non-compliance rather than honest confusion or logistical problems.

Days 30 through 60: Things Get Public

When persuasion doesnt work the SEC files a motion to compel in federal district court. This is the moment everything changes. What was a confidential investigation is now a public court filing. Journalists who monitor these filings will see it. Industry publications pick up the story. Your name is now associated with SEC enforcement in searchable public records.

Days 60 through 90: Court Order Issued

A federal judge reviews the SEC’s petition and almost certainly issues an order compelling you to comply. Courts give tremendous defference to SEC subpoenas – the agency doesnt file these motions unless there confident they’ll win. Now your not just defying the SEC, your defying a federal court order which is a whole different level of serious.

Day 90 and Beyond: Contempt Proceedings

You still havent complied. The SEC moves for a contempt finding. The judge holds a hearing, finds you in contempt, and the penalties begin. Civil contempt means fines – often $1,000 or more per day – accumulating until you finally comply. Criminal contempt means actual jail time. Sometimes both happen.

The Final Stage: Arrest

If you continue resisting, a warrant gets issued. U.S. Marshals show up at your home or office. You get arrested, processed, and appear before a judge for a bond hearing. This is exactly what happened to Anthony Coronati. He had to post $50,000 bond and was restricted to the Southern and Eastern Districts of New York – meaning an executive who might need to travel for business literaly couldnt leave the NYC area.

The Terraform Labs case from 2024 shows even major companys with sophisticated legal teams cant escape this process. When there CEO refused to comply with SEC subpoenas, the company actually tried sueing the SEC – an unusual and aggresive move. The SEC responded with an enforcement petition and the court gave Terraform just 10 days to prove the subpoenas were somehow invalid. They were facing mandatory compliance or contempt just like any individual would.

Two Types of Contempt – Both Are Terrible for You

When people hear “contempt of court” they usually have a vague sense that its bad without really understanding what it means. There are actually two different kinds and understanding the distinction matters because you could end up facing both simultaneusly.

Civil Contempt: The Daily Financial Bleeding

Civil contempt is coercive – the point is to force you to comply. The court imposes fines that continue accumulating every single day you refuse to cooperate. Were not talking about one-time penalties here, were talking about $1,000 or more per day draining your bank account continuosly.

The fines dont stop untill you comply. Theres no maximum amount, no cap, no point where they say “okay thats enough punishment.” I’ve seen cases where civil contempt fines accumulated into the tens of thousands of dollars before the person finally gave in. All that money – gone – and they still had to comply anyway.

The other thing about civil contempt is that even though its “civil” not “criminal” it still goes on your record. Future background checks will find it. Its public information that anyone can access. And the purpose – remeber – is to coerce compliance which means the court will keep ratcheting up pressure untill you break.

Criminal Contempt: Actual Jail Time

Criminal contempt is punitive – the point is to punish you for disobeying the court’s authority. This is where jail time comes in. Under 18 U.S.C. § 401 federal courts can impose up to six months incarceration for criminal contempt. In some circumstances involving violation of specific court orders the penaltys can extend to a year or more.

Unlike civil contempt wich ends when you comply, criminal contempt is a permanant conviction on your record. Youve now been convicted of a federal crime for refusing to cooperate with an investigation – an investigation that, remeber, may not have even resulted in charges against you if you’d just complied in the first place.

You can face both types simulatneously. Civil fines accumulating while you sit in jail serving a criminal contempt sentence. Then when you get out you still have to comply with the subpoena – the underlying obligation never goes away.

The Coronati Outcome

Lets look at what actually happened to Anthony Coronati because its a perfect illustration of how this plays out. He ignored SEC subpoenas demanding documents and testimony. In November 2013 a federal court ordered him to comply. He still didnt.

On January 17 2014 the court found him in civil contempt. U.S. Marshals arrested him. He had to post $50,000 bond to get released – money that could have gone toward an attorney to handle this properly from the begining. His travel was restricted to just the Southern and Eastern Districts of New York. And on top of everything else, he was ordered to reimburse the SEC $4,812 for there costs in haveing to chase him down.

All of this is permanant public record now. Search his name and you find SEC litigation releases detailing exactly what happened. Whatever the original investigation was about – whatever they wanted documents for – got completley overshadowed by his decision to ignore the subpoena.

Your Private Investigation Becomes Permenant Public Record

This is the part that suprises people the most and I think its actualy one of the biggest consequences of ignoring an SEC subpoena – maybe even bigger than the fines in some ways.

Right now, if your under SEC investigation, that investigation is confidential. The SEC doesnt announce who there investigating. There’s no press release, no public filing, nothing that would tip off the world to whats happening. Your employer probaly doesnt know. Your clients definetely dont know. Your competitors have no idea. The investigation exists in this private bubble.

The moment you ignore a subpoena and force the SEC to go to federal court, that bubble pops completley. Court filings are public records. The SEC’s motion to compel will describe who you are, what there investigating, and what documents or testimony they need. Journalists who cover financial regulation monitor these filings specificaly looking for stories. Industry publications will report on it. Legal blogs will analyze it.

And once somethings in federal court records it never goes away. Fifteen years from now if someone googles your name – a potential employer, a potential client, a journalist doing background research – theyre going to find those court documents. The narrative wont be “this person was investigated by the SEC.” The narrative will be “this person ignored SEC subpoenas, got dragged into federal court, and was found in contempt.”

For professionals in finance, law, accounting, or any reputaton-dependant field this is absolutley devastating. I’ve talked to people who say “well I’m already being investigated so whats the difference?” The difference is enourmous. An investigation might end with no action taken, might result in a settlement with no admission of wrongdoing, might become a footnote nobody ever notices. But contempt of court for ignoring a subpoena? Thats a headline. Thats a story. Thats the first thing people will find when they look you up.

Career Death: The Professional License Cascade

If you work in the securities industry or any regulated profession, the consequenses of ignoring an SEC subpoena extend far beyond fines and jail time. Your entire career can evaporate through whats essentially a chain reaction that nobody warns you about.

The FINRA Double-Bind

Heres something that trips up alot of people – the rules are different for FINRA than they are for the SEC, and many individuals face both simulatneously.

With the SEC you can invoke your Fifth Amendment right against self-incrimination. You still have to show up, you still have to assert the privilege question-by-question rather than just refusing to appear entirely, but the option exists. The SEC might draw adverse inferences in a civil proceeding but they cant force you to incriminate yourself.

FINRA operates completley differently. Under FINRA Rule 8210 you are required to cooperate fully with there investigations. If you invoke the Fifth Amendment in a FINRA proceeding – if you refuse to answer questions citing your constitutional rights – FINRA will automaticaly bar you from the securities industry. Not after a hearing. Not after consideration of your reasons. Automaticaly.

And FINRA Rule 8311 prohibits any FINRA member firm from employeing someone who’s been suspended or barred. So once that bar goes into effect you literaly cannot work at any broker-dealer in the country. Your career in securities is over.

Many people facing SEC subpoenas are also registered with FINRA. They face this impossable choice – cooperate fully and potentially incriminate yourself, or invoke your rights and definately lose your career. Navigating this requires extremely sophisticated legal strategy which is another reason why handling this without experienced counsel is so dangerous.

The Cascading Effect

It gets worse. The consequenses dont stop with one agency – they cascade through every regulatory body that has any oversight of your career.

1. SEC enforcement action results in bars from SEC-regulated activities
2. FINRA automaticaly suspends you based on the SEC action – even before your case is resolved
3. State regulators follow suit – most states automaticaly suspend investment adviser licenses when FINRA takes action
4. Professional certifcations like CFA, CFP, or CPA may be revoked based on regulatory actions
5. Background check systems flag you permanantly for any future employment

The result is total industry lockout. You cant work at a broker-dealer. You cant work as a registered investment adviser. You cant work at a bank in any securities-related capacity. Even jobs in related fields become impossible because background checks reveal the regulatory actions.

Real Numbers

In September 2024 alone, the SEC charged 13 firms and 10 individuals in a single enforcement sweep related to off-channel communications violations. Individual penalties ranged from $10,000 to $200,000. Firm penalties hit as high as $750,000. And beyond the financial penalties every single one of those individuals and firms now has SEC enforcement actions in there permanant records.

Industry bars appear on BrokerCheck, FINRA’s public database that anyone can search. Potential employers, clients, and journalists can look you up instantly. There’s no expungement, no sealing of records, no way to make it disapear. A single decision to ignore a subpoena can permanantly lock you out of an entire industry.

Why Partial Compliance Doesnt Work Either

I want to address something that comes up regulary in consultations – the idea that you can give the SEC “some” of what they want while holding back the really problematic stuff. This strategy fails completley and can actually make your situaton worse.

The Courts View

A subpoena demands complete compliance. Not partial compliance, not “most” of the documents, not “everything except the embarassing stuff.” Complete compliance. When you produce some documents but withhold others, courts treat this as non-compliance – period. Your not getting credit for partial cooperation. Your getting the same contempt finding as someone who produced nothing at all.

Worse, selective production can support obstruction of justice charges. If investigators can show you intentionaly withheld specific documents to impede there investigation, thats a seperate criminal offense under 18 U.S.C. § 1505. Penalties for obstruction can reach five years in federal prison. So you’ve taken a contempt situation – bad but survivable – and turned it into potential obstruction charges – which is vastly worse.

Document Preservation Requirements

The obligations dont stop at what you choose to produce. Once you recieve an SEC subpoena you have a legal duty to preserve all documents that might be responsive. This preservation requirement:

• Extends to all employees who might have relevant information
• Covers electronic records including emails, texts, voicemails, and chat logs
• Continues indefinately until the investigation concludes
• Cannot be avoided by “accidentally” deleting things

Destroying documents after recieving a subpoena is a seperate criminal offense – obstruction of justice and evidence tampering. People have gone to federal prison specificaly for deleteing emails after learning they were under investigation, even when the underlying investigation might not have resulted in charges.

Privilege Assertions

There are legitimate reasons you might not have to produce certain documents – attorney-client privilege being the most common. But you cant just refuse to produce privileged documents. You have to:

• Create a detailed privilege log describing each withheld document
• Explain the specific privilege being asserted
• Provide enough information for the privilege claim to be evaluated
• Have an attorney review everything before production

Blanket assertions like “everything is privileged” get rejected immediatley. Failing to produce a proper privilege log can waive your privilege claims entirely. This is technical legal work that requires experienced counsel – another reason going it alone is such a bad idea.

What You Should Actually Do Instead of Ignoring

Okay, so ignoring is off the table. Partial compliance doesnt work. What are your actual options here? More than you might think – but all of them require taking action rather than hopeing the problem goes away.

The 14-Day Objection Window

If you believe the subpoena has problems – its overly broad, requests privileged information, or is otherwise improper – you have 14 days from service to file a formal written objection. This is an actual legal right, not just a delay tactic, and exerciseing it properly preserves your ability to challenge the subpoena in court.

Missing this window typically waives your right to object. So even if your planning to comply eventually, if you have any concerns about the subpoenas scope you need to act within those first 14 days.

Extension Requests

SEC staff routinely grant short extensions for compliance – typically 14 additional days – when requested in good faith. The key word is “requested.” You cant just miss the deadline and explain later. You have to ask before the deadline passes.

An extension request:

• Should come from your attorney (highly recomended)
• Must explain why additional time is needed
• Should propose a specific new deadline
• Demonstrates good faith rather than evasion

Getting an extension buys crucial time to gather documents, review for privilege, and develop a proper response strategy. It’s not ignoring – its handling things professionally. The SEC much prefers working with cooperative respondants than haveing to drag people into federal court.

Motion to Quash or Modify

If a subpoena is genuinely improper – requesting information beyond the SEC’s authority, demanding unreasonable volumes of documents, or infringing on constitutional rights – you can file a motion to quash or modify it. The burden is on you to prove the subpoena is unreasonable, and courts give the SEC significant defference, but its a legitimate legal avenue.

More often than outright quashing, courts will modify subpoenas that are overly broad. They might narrow the time period covered, limit the types of documents required, or adjust other terms to make compliance more managable. This is different from ignoring – its using the legal system to adjust the subpoenas scope while still complying with its core requirements.

Negotiating Scope

Something alot of people dont realize – SEC staff are often willing to discuss subpoena scope informaly. If document production would be extremley burdensome, if certain requests seem to go beyond what the investigation actually needs, if there are logistical challenges, experienced counsel can often negotiate modifications directly with the enforcement staff.

This only works when you approach it professionaly and in good faith. Call them, explain the issues, propose alternatives. Ignoring them and then trying to negotiate from a position of contempt? That leverage is gone. Youve already demonstrated bad faith by forcing them into federal court.

Cooperation Credit

In September 2024 the SEC announced they didnt impose penalties on a firm that had self-reported violations during a third-party investigation. The firm got cooperation credit that completley offset what would have been significant fines. This illustrates something important – how you respond to SEC engagement matters for eventual outcomes.

Cooperation credit can reduce penalties, influence charging decisions, and affect the tone of the entire investigation. Ignoring subpoenas eliminates any possibility of cooperation credit. Your signaling the exact opposite of cooperation.

The Fifth Amendment Trap You Need to Understand

The Fifth Amendment gives you the right not to incriminate yourself. But exerciseing this right in regulatory investigations is far more complicated than people realize and getting it wrong can be catastrophic.

How It Works with the SEC

You can invoke your Fifth Amendment rights in SEC proceedings. However:

• You must still appear when summoned – you cant just refuse to show up
• You must assert the privilege question-by-question – blanket refusals dont work
• The SEC can draw adverse inferences from your invocation in civil proceedings
• Invoking the Fifth doesnt protect documents – only testimony

So your sitting there in testimony, the SEC asks a question, and you say “I invoke my Fifth Amendment right and decline to answer.” Thats valid. But they get to note that you refused to answer and a jury or judge in any civil proceeding can consider that refusal when evaluating the evidence.

The FINRA Trap

FINRA is a self-regulatory organizaton, not a government agency. The Fifth Amendment – which protects you from government compulsion to self-incriminate – doesnt apply the same way. FINRA’s position is that participating in the securities industry means accepting there regulatory authority including the obligation to cooperate with investigations.

If you invoke the Fifth Amendment in response to a FINRA request for information or testimony, FINRA will bar you from the industry. Not might bar you. Will bar you. Automaticaly. This is the catch-22 many people face – answer FINRA’s questions and potentially incriminate yourself in an SEC or criminal proceeding, or invoke your rights and definately lose your career.

Parallel Investigation Problems

The situation gets even more complex when multiple investigations are running simultaneusly. An SEC civil investigation, a FINRA examination, and a DOJ criminal investigation might all be looking at the same conduct at the same time. What you say to one can reach the others:

• SEC can share testimony with DOJ criminal prosecutors
• FINRA findings become evidence in SEC proceedings
• Criminal prosecutors can use civil testimony against you
• Each agency has different rules about your rights

Navigating this requires an attorney who understands all three regimes and can develop a strategy that protects you across all of them. Going it alone or ignoring any of these agencies makes everything worse.

Real Cases: What Happened When People Tried Ignoring

I’ve been talking about consequenses in the abstract. Lets look at some specific cases so you can see exactly how this plays out in practice.

Anthony Coronati

Coronati recieved SEC subpoenas demanding both documents and testimony related to an investigation. He decided not to comply. The SEC went to federal court and obtained an order compelling him to cooperate – that order came down in November 2013. He still didnt comply.

On January 17 2014 the court found him in civil contempt. U.S. Marshals arrested him. Not some distant threat, not a theoretical possibility – actual federal officers showing up and taking him into custody. He had to post $50,000 bond to secure his release. The court restricted his travel to just the Southern and Eastern Districts of New York meaning he couldnt leave the NYC metropolitan area.

He was also ordered to reimburse the SEC $4,812 for there costs in haveing to chase him through the legal system. So he paid money to the government for the privilege of being arrested.

The SEC litigation release about his case is permanant public record. Whatever the original investigation was about got completley overshadowed by the contempt finding.

Terraform Labs (2024)

Even major corporations with sophisticated legal teams cant ignore SEC subpoenas without consequenses. Terraform Labs and its CEO Do Kwon faced SEC subpoenas and decided to fight – going so far as to actually sue the SEC claiming they lacked authority. That’s an unusualy aggresive strategy that most individuals couldnt afford.

The SEC responded by filing an enforcement petition in federal court. The court gave Terraform just 10 days to demonstrate that the subpoenas were invalid – a very short timeframe that shows how seriously courts take SEC enforcement authority. They faced mandatory compliance or contempt just like any individual would.

The lesson? If a multi-billion dollar company with access to the best lawyers money can buy cant succesfully ignore SEC subpoenas, neither can you.

Pattern Recognition

After years of watching these cases I can tell you – no one succesfully ignores SEC subpoenas. The enforcement mechanism works every single time. The only variables are how much you suffer before you eventualy comply and how much permanent damage you do to your record and reputation in the process.

Your Next Steps – Starting Today

If your reading this article because you actualy have an SEC subpoena right now, heres what you need to do. Not next week. Not after you’ve had time to think about it. Today.

Immediate Actions

1. Do not destroy any documents – This creates a seperate criminal charge (obstruction) thats often worse than whatever there investigating in the first place
2. Preserve all electronic communications – Send litigation hold notices, backup systems, stop auto-deletion
3. Note your compliance deadline – Mark it somewhere prominent
4. Calculate your 14-day objection window – If you have concerns about the subpoenas scope you need to act fast
5. Contact an attorney immediatley – You need someone with specific SEC defense experience

What to Look for in Counsel

Not every attorney can handle SEC matters effectively. Look for:

• Specific experience with SEC enforcement – not just “federal matters” or “white collar” generally
• Former SEC enforcement staff are often valueable because they understand how the agency thinks
• Someone who understands parallel investigation risks (SEC/FINRA/DOJ)
• Track record negotiating subpoena scope and extensions
• Availability to act quickly – your dealing with short deadlines

Timeline Pressure

I cant emphasize this enough – you likely have days not weeks to respond properly. Extension requests must come before your deadline passes. Objections have strict timing requirements. Every day you wait reduces your options and increases the risk that something goes wrong.

The temptation to procrastinate is understandable. This is scary, its overwhelming, and maybe if you dont think about it the anxiety goes away for a while. But waiting doesnt make the problem smaller – it makes it bigger. And once you miss key deadlines the options narrow dramaticaly.

The Bottom Line: Ignoring Is Not a Strategy

Ignoring an SEC subpoena isnt a strategy – its a path to arrest, contempt, career destruction, and permanant public record. Every single person who’s tried it has regretted it. Every single one.

The good news is there are legitimate ways to handle this:

• Extensions can be requested and are routinely granted
• Subpoena scope can sometimes be negotiated
• Privilege assertions protect certain information when done properly
• Cooperation credit can reduce eventual penalties
• Experienced counsel knows how to navigate all of this

Anthony Coronati probaly spent more fighting his contempt charges than he would have spent just complying with proper legal representation from the begining. The arrest, the bond, the travel restrictions, the legal fees to fight contempt, the reimbursement to the SEC, the permanant record – all of it could have been avoided by responding properly in the first place.

Dont make his mistake. If youve recieved an SEC subpoena, the clock is ticking. Contact an experienced SEC defense attorney today. Not tomorrow, not next week, not after you’ve had time to think about it. Today. The consequenses of waiting are simply too severe.

Frequently Asked Questions

Can I get in trouble for ignoring an SEC subpoena?

Yes – serious trouble. Ignoring an SEC subpoena can result in civil contempt (daily fines until you comply), criminal contempt (up to 6 months in jail), obstruction of justice charges (up to 5 years in prison), and permanent damage to your professional licenses and reputation. The SEC has full authority to enforce subpoenas through federal courts.

How long do I have to respond to an SEC subpoena?

The subpoena itself will specify a compliance deadline, typically 14-30 days. You have 14 days from service to file formal written objections. Extension requests can be made but must be filed before the deadline passes – missing the deadline then trying to explain is not effective.

Can I plead the Fifth Amendment in an SEC investigation?

Yes, but with significant limitations. You must still appear when summoned and assert the privilege question-by-question. The SEC can draw adverse inferences from your invocation in civil proceedings. And importantly – with FINRA (which many securities professionals also face) invoking the Fifth Amendment results in automatic industry bar.

What if I only have some of the documents the SEC wants?

You must produce everything you have and explain what’s missing. Partial compliance is treated as non-compliance by courts. Deliberately withholding documents can support obstruction charges. If you genuinely dont have certain documents, document your search efforts and explain the gaps to your attorney.

Will the SEC go away if I wait long enough?

No. The SEC has the resources and mandate to pursue every investigation they open. They recieved over 24,000 whistleblower tips in 2024 alone and distributed $255 million in awards. The enforcement division is well-funded, well-staffed, and does not forget about cases. Waiting only makes your situation worse.

Can I negotiate the scope of an SEC subpoena?

Yes, often. SEC staff are frequently willing to discuss modifications when approached professionally. An experienced attorney can negotiate narrower time periods, specific document types, or other limitations that make compliance more manageable while still satisfying the investigation’s needs. This must be done proactively – not after you’ve already missed deadlines or been found in contempt.