As the epicenter of the financial industry in the United States – and one of the greatest centers of finance in the entire world – New York operates under a unique set of federal and state regulations that cover banks and other businesses.
Under federal law, the United States Attorney General and other officials within the United States Department of Justice, the Federal Bureau of Investigation, and other regulatory agencies in the federal government may have the power to issues subpoenas demanding the production of documents or testimony in ongoing investigations.
In New York state specifically, a 1921 law known as the Martin Act vests special subpoena powers to the New York Attorney General – a lawyer elected by a statewide popular vote every four years. Under the Martin Act, the New York Attorney General, as well as District Attorneys throughout the state, have broad authority to investigate and bring charges in financial fraud cases.
If the Attorney General or a District Attorney in New York believe that you, your business, or your associates have been involved in any financial or securities fraud scheme, they may open a wide-ranging investigation with few parameters on what information they cannot seek.
Through their investigative divisions, the Attorney General or a District Attorney can examine all of your actions and determine whether or not you violated any laws – or even individuals’ trust – in your financial and business activities.
The Martin Act is particularly stringent in that it includes no mens rea defense. In other words, under the strict liability standard applied by the law, you can be found guilty of financial fraud under the Martin Act even if you did so entirely unintentionally.
As another point of warning for people subpoenaed in Martin Act cases, successive New York Attorneys General have gradually increased the scope of the law to cover activities that were once considered tangential to financial fraud. For instance, the current Attorney General is pursuing oil companies over the non-disclosure of their research about the effects of climate change.
When you are under subpoena from the Attorney General – or from an federal or state law enforcement agency – you are expected to appear at a time specified to give oral testimony or to produce documents for review.
However, there are some grounds to contest these subpoenas. For instance, courts may quash a subpoena that is overly broad or that impinges on constitutional rights, such as the right to confidential communication between an attorney and a client or the Fifth Amendment right of an individual to decline to provide testimony (although not information) that may incriminate them. A criminal defense attorney can develop a legal strategy to defeat a subpoena from the Attorney General.
For individuals found guilty of financial fraud under the Martin Act, violations are punishable by up to four years in prison and massive fines based on the assessed dollar amount of the fraud in question. Penalties can be even stiffer if the information obtained in a subpoena – either federal or state – results in other criminal charges.
If you, your business, your associates, or a loved one has received a subpoena from the Attorney General or another legal official, it is incumbent upon you to find a competent, qualified criminal defense attorney immediately.
The heavy penalties under the Martin Act are not the only ones that you can face during a Martin Act investigation. The destruction or improper storage of documents – or even any conversations between you and your affiliates – may be considered obstruction of justice and result in even heavier penalties. The same caution also applies to all federal subpoenas.
A trusted criminal lawyer will be able to guide you through the investigation and decide whether or not to contest the subpoena. If you are ultimately charged under the Martin Act, another state law, or under a federal statute, a criminal defense attorney can work with prosecutors on a plea agreement that limits your legal liability or – if necessary – present a strong defense before a judge and jury.
Delaying hiring an attorney, even by a few days, can have a dramatic impact on your legal liability in investigations where a subpoena has been issued. That makes it imperative that you contact an attorney quickly.