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Mar 27, 2018

Responding To SEC Subpoenas

Everyone hopes they’ll never be involved in an SEC investigation, but unfortunately many financial professionals do get trapped. Receiving an SEC subpoena is difficult, and can be a worrisome event. For a financial professional to receive an SEC Subpoena is intimidating. You’re wondering why the SEC is contacting you, and wondering whether responding to SEC subpoenas is a good idea. Receiving a subpoena is definitely not something you want. When this happens, speak to our SEC attorneys on the manner in which you should respond to sec subpoenas. Generally, individuals are contacted by the SEC for two reasons: 1) you’re the subject of the investigation, and 2) the SEC believes you might have valuable information pertaining to an ongoing investigation.

Regardless of the reason, you will be subpoenaed to provide documents or testify, or both, depending on what the SEC hopes to get from you. As a result, it’s important to see what the SEC’s intention is, because responding to SEC subpoenas is an art. Subpoenas for documents are straightforward – the SEC will ask for specific types of documents which have to be provided to the SEC  by a specific date. In order to comply with the subpoena, the recipient of the subpoena has to respond to the SEC subpoena with all of the documents by the due date.

If the SEC calls you to provide testimony, then this is known as an on the record interview. Subpoenas for testimony are straightforward and so is responding to SEC subpoenas for testimony. The subpoena will state where, and when, the person has to appear to testify. It will contain no clues on what the testimony requested will be about. In advance of the OTR, you will need to prove documents related to transactions, businesses, etc, that will be probed regarding in the OTR. You could also be questioned on documents and testimony provided by others.

Before responding to SEC subpoenas, you should contact us. We understand these matters, and it’s important we get a copy of the formal order of investigation, which will tell us some more detail about the investigation you have been called to testify/produce documents about. It’s important you understand and be prepared to give responses to subpoenas, both in terms of testimony and documents. You’re now involved in a litigation matter, and every word matters. Once you respond to the subpoena and appear at the OTR, the SEC can choose to charge you, or determine it won’t pursue action against you. The SEC can pursue you civilly or criminally. More often than not, individuals are pursued civilly, either in court, or via an administrative proceeding. Prior to being formally charged, individuals are given a chance to settle the matter and agree sanctions. Generally, common sanctions include revocation/suspension of licenses, disgorgement, and monetary fines. Criminal charges, if pursued, can result in imprisonment among other penalties.

Due to the sheer magnitude of the penalties you’re facing, you need to focus on protecting yourself – you need an attorney on your side who can respond to the SEC subpoena and keep you out of trouble. You need to understand whose the target of the SEC investigation. Is it you, someone you work with, or someone you did business with? These questions don’t have readily available answers. SEC subpoenas are very specific in what they request, and are very vague. As a result, from the first second you get an SEC subpoena, have one of our attorneys handle it. You probably don’t have experience in dealing with the SEC, and are unaware of protections available to you.

 

 

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Manhattan

85 Broad Street, 30th Floor
New York, NY 10005

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888-977-6335

Queens

35-37 36th St,
Astoria, NY 11106

Phone

888-977-6335

Brooklyn

195 Montague St.
14th Floor,
Brooklyn, NY 11201

Phone

888-977-6335