Last Updated on: 19th October 2023, 12:32 pm

SEC Subpoena Representation: What You Need to Know

Getting a subpoena from the SEC can be intimidating. But don’t panic! With the right legal help, you can get through it. This article will walk you through what an SEC subpoena is, what it means for you, and how an attorney can help.

Why Did I Get an SEC Subpoena?

There’s a few reasons you may have gotten an SEC subpoena:

• You’re the target of an investigation – this means the SEC thinks you personally violated securities laws
• You’re a witness in an investigation – the SEC wants information you have that’s relevant to someone else’s potential violations
• Your company or organization is being investigated and the SEC wants company documents or testimony from employees

The SEC doesn’t need to tell you why they’re investigating or if you’re a target or witness. But an experienced SEC defense attorney can usually figure it out from the subpoena requests and help protect your interests.

Responding to an SEC Subpoena

The SEC will give you a deadline to respond to the subpoena, usually a few weeks to a month or more. As soon as you get it, you should contact an attorney experienced with SEC investigations and subpoenas. They can help you:

• Review the subpoena requests and figure out what information the SEC is after
• Negotiate with the SEC to narrow overly broad or unreasonable requests
• Assert any legal privileges or protections that allow you to limit disclosure
• Gather responsive documents from you, your company, accountants, etc.
• Prepare you for SEC testimony by explaining the process and your rights

An SEC subpoena response is highly strategic. What you disclose and how you disclose it can impact the investigation. You want to be cooperative without giving the SEC ammunition they could use against you. An attorney knows how to walk this line.

Protecting Privileged Information

Not everything the SEC asks for has to be turned over. As an attorney, I can assert privileges and protections such as:

• Attorney-client privilege – shields confidential attorney-client communications from disclosure
• Work product doctrine – protects documents prepared in anticipation of litigation
• Fifth Amendment – allows individuals to refuse to testify if it may incriminate them
• Executive privilege – limits access to executive branch communications

Determining what’s privileged takes legal expertise. I work to protect sensitive information without obstructing the investigation. That balance is key to resolving the matter favorably.

Should I Assert the Fifth Amendment?

The Fifth Amendment right against self-incrimination lets you refuse to testify or provide information that could implicate you in a crime. Whether to assert it is a strategic decision. On one hand, it avoids creating evidence the SEC could use against you. But on the other, it can make you look guilty.

Here are some factors I consider when advising clients whether to assert the Fifth:

• Are you a target or just a witness? Targets have more risk of self-incrimination.
• Is there existing evidence that already implicates you? Then testimony may not add much.
• Is the SEC likely to grant you immunity in exchange for testimony?
• What impression will asserting the Fifth make? How will it impact the investigation?

There’s also something called “act of production privilege” – asserting the Fifth to avoid turning over documents that just possessing may incriminate you. This only applies in certain circumstances. As your attorney, I can advise you on whether it’s appropriate.

What Happens After Responding to the Subpoena?

After you respond, the SEC will review the information and decide next steps. Possible outcomes include:

• The SEC drops the investigation or clears you of wrongdoing
• The SEC brings civil charges against you
• The SEC refers the case to the DOJ for criminal prosecution
• The SEC settles the charges through a cease-and-desist order or financial penalties

Throughout this process, I work to put you in the best position by:

• Negotiating with the SEC for a favorable settlement
• Contesting unjust or unfounded charges
• Preparing a robust defense strategy for litigation or trial
• Navigating DOJ interactions if a criminal case results

My goal is resolving the matter without litigation or minimizing the impact if it goes to court. The right legal strategy can often achieve this.

SEC Subpoenas in Financial Reporting Cases

One common area the SEC investigates is improper financial reporting and accounting fraud. Some key issues that arise in these cases include:

• Improper revenue recognition – like recording revenue before it’s earned
• Concealing liabilities or expenses – to make financials look better
• Inflating assets – overstating the value of inventory, receivables, etc.
• Inadequate internal controls and audit failures
• Misleading disclosures in SEC filings and press releases

Defending complex accounting cases requires understanding GAAP standards and financial statement requirements. As an experienced SEC enforcement attorney, I have the technical expertise to handle these matters.

SEC Subpoenas in Insider Trading Cases

Another common SEC subpoena targets insider trading – using non-public information to trade stocks. Key insider trading issues include:

• Trading on material non-public information about earnings, mergers, etc.
• Tipping others like friends or family
• Failure by executives, lawyers, bankers to protect confidential data

Fighting insider trading charges requires meticulously reconstructing timelines of who knew what when. As your attorney, I dig into phone records, trading data, and other forensic evidence to build the best defense.

SEC Subpoenas in Market Manipulation Cases

The SEC also investigates market manipulation schemes like:

• Pump-and-dump scams
• Spoofing and layering trades to artificially impact prices
• Manipulative short selling and bear raids
• False news articles and social media posts

In market manipulation cases, the SEC looks for evidence of coordinated trading patterns across multiple accounts and parties. As your attorney, I can identify other possible explanations for unusual trading activity. I also work with market experts to undermine the SEC’s theories.

Responding to SEC Wells Notices and Wells Meetings

If the SEC staff decides they intend to recommend charges against you, they will first send a Wells notice informing you of the charges. This starts a Wells process where we can submit a Wells submission to the SEC arguing why the charges are unfounded before they are officially brought. I help clients craft persuasive Wells submissions that have convinced the SEC to reverse course in many cases.

The Wells notice may also give you the opportunity to request a Wells meeting with SEC staff to personally make your case. I prepare clients for these critical meetings, helping them tell their side in the most compelling way possible. In some cases, we’ve been able to convince the SEC to drop the matter altogether.

Avoiding SEC Investigations Before They Start

They say an ounce of prevention is worth a pound of cure. Some tips to avoid SEC trouble in the first place:

• Implement strong internal compliance programs and controls
• Provide regular employee training on policies and ethical issues
• Consult securities counsel before major transactions or regulatory filings
• Conduct periodic compliance audits and risk assessments
• Put protocols in place to contain and retain documents and communications

Setting up robust compliance early allows you to demonstrate good faith if issues later arise. I regularly advise clients on designing programs tailored to their needs.

Why Do I Need an Attorney for an SEC Subpoena?

Navigating an SEC subpoena without experienced counsel is extremely risky. The downside of missteps includes:

• Loss of privileges and confidentiality protections
• Missed opportunities to negotiate or narrow subpoena scope
• Failure to present defenses and counterarguments as strongly as possible
• Disclosure of unnecessary or damaging information
• Increased likelihood of charges or criminal prosecution

An attorney knows how to respond strategically in your best interest. The right legal advice can mean the difference between a favorable outcome or severe penalties. Don’t go it alone.

Choosing the Right SEC Subpoena Attorney

When facing an SEC subpoena, who you choose as counsel is critical. Look for a lawyer with:

• Extensive SEC defense experience
• A proven record getting positive results for clients
• Knowledge of securities laws and financial accounting principles
• Relationships and credibility with SEC staff
• Litigation skills in case charges result

I have over 15 years handling complex SEC matters just like yours. My firm has the expertise and resources to protect your interests in this investigation. If you’ve been subpoenaed, I encourage you to contact me for a free consultation. I’m here to help.