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Preparing Clients for Testimony After Receipt of SEC Target Letter
|Last Updated on: 24th September 2023, 05:54 pm
Dealing With an SEC Investigation: What to Do If You Get a Target Letter
Getting a target letter from the SEC can make anyone feel anxious and overwhelmed. As a lawyer, it’s your job to fully prepare your client so they feel empowered and ready to testify truthfully. This article shares tips on how to get your client ready for questioning after receiving notice from the SEC.
Take it Step-by-Step
First things first, sit down with your client and walk through what happened from start to finish. Make sure their story makes sense and they have all the facts straight. Look for any holes or inconsistencies in their recollection of events that need to be smoothed over. You want them to come across as trustworthy and credible under questioning.
Anticipate the Questions
Based on the target letter and what you know about the investigation, try to predict what kinds of questions the SEC will ask during testimony. Make a list of these questions and practice having your client answer them. Listen closely to their responses to spot any iffy areas that need work. Do mock Q&A sessions until your client can respond smoothly and with confidence.
Keep Answers Short and Truthful
Caution your client against rambling on or offering information that wasn’t asked for. Tell them to listen carefully, answer only what was asked directly, and leave it at that. The less said, the better. Warn them not to speculate, exaggerate, or lie under any circumstances.
Honesty is the Best Policy
Stress to your client that it’s imperative they tell the complete truth during testimony. Lying or obstruction will only cause bigger issues down the road. If they truly don’t remember something or don’t know the answer, “I don’t recall” or “I don’t know” are perfectly fine responses. Saying too much can be just as problematic as saying too little.
Review the Paper Trail
Look over any documents the SEC requested and make sure your client is fully up to speed on them. Refresh their memory about any papers they wrote or received. Their testimony needs to sync up with the paper trail.
Keep Your Cool
Tell your client not to get into arguments with the questioner. Their role is to cooperate and provide truthful testimony – not debate the merits of the investigation. Leave that to their legal counsel if objections need to be raised.
Take Breaks When Needed
Remind your client they can ask for a break at any point if they’re feeling overwhelmed or need to collect their thoughts. A short breather can help lower tension.
Stay Calm Under Pressure
Testimony can get emotional at times. Counsel your client to keep their composure no matter what. Deep breaths and staying calm will help them get through it.
Review Afterwards
Once testimony is over, follow up to go over any rough spots that came up. Get ahead of any issues in case more testimony is needed later on.The key is making sure your client understands what to expect, is ready for likely questions, and focuses on giving direct and truthful answers. This will allow them to come across as cooperative and reliable.Here are some additional tips when prepping a client:
- Have them practice delivering their testimony out loud multiple times
- Advise them to dress professionally and mind their manners
- Tell them to listen carefully before responding
- Recommend getting a good night’s sleep and eating well beforehand
- If possible, do a mock run-through in the actual deposition room
With the right preparation, your client can feel empowered and ready to participate effectively in the SEC investigation process. The most important thing is making sure they comprehend what’s involved, anticipate questions, and concentrate on giving straightforward, consistent and honest responses. This will enable them to appear helpful and forthright.Let me know if you have any other questions! I’m happy to chat more about strategies for getting clients ready for SEC testimony.