27 Aug 23

SEC Subpoena – Definitive Guide 2023

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Last Updated on: 28th August 2023, 03:29 am

What is an SEC Subpoena? Why do I need an attorney?

An SEC subpoena is essentially a request for information from a government agency. The Securities and Exchange Commission (SEC), in the course of it’s work – frequently issues these subpoenas when it’s looking at potential violation of securities laws. These laws by the SEC are aimed at helping and protecting investors. The laws do this by requiring publicly traded companies to disclose important information truthfully – and making sure that traders and companies act honestly.

Why is the SEC Subpoena Being Sent To Me?

There are so many reasons why the SEC is sending a subpoena to you or your company. Here are some potential reasons:

  • The SEC is under the impression you have important information related to an investigation of securities fraud or other offenses. They want to ask you questions or get documents from you related to these transactions. Examples of fraud could be insider trading.
  • You work for a public company, and the SEC is under the impression the company has misled investors or has reporting rules.
  • The SEC is auditing your company or investigating an employee for insider trading.

Regardless of the reason, when you get an SEC subpoena – it means they have questions for you. You want an SEC subpoena lawyer in situations like this who can help you.

Here are four key reasons you need an experienced securities lawyer on your side:

1. They Understand SEC Investigations -good to be honest with the attorney – and discuss your case. That way, he or she can explain their experience with previous cases similar to yours. Here are some tips on finding the best SEC lawyer:

  • Ask about their SEC subpoena case record, and how well they’ve performed in the past.
  • Request references from past clients who faced SEC subpoenas. What was the outcome of those cases with the SEC?
  • Look for a lawyer who used to work at the SEC. They probably have friendly contacts, who they can talk to.
  • Find someone with trial experience, not just negotiation skills. You want someone who can go to court if your case goes to trial.

Frequently Asked Questions About SEC Subpoenas

What happens if I ignore an SEC subpoena?

Ignoring an SEC subpoena is never recommended. The SEC can go to court to enforce compliance and charge you with obstruction of justice. You could face criminal prosecution, steep fines, and jail time. Bottom line, ignoring the SEC subpoena is not an option. Do not even think about ignoring it. There’s virtually no reason to do it. You should engage with an attorney who can engage the SEC in a healthy process.

Do I have to comply with an SEC subpoena?

In most cases, yes. The SEC has legal authority to issue subpoenas as part of its investigations. But an experienced securities lawyer may be able to challenge the subpoena if it seems improper or overly broad. The only way to know if the SEC subpoena is broad, or improper, is if you speak to an attorney first. The SEC subpoena is a serious issue. It’s never a good idea to ignore SEC subpoena’s, and it’s a good idea to hire an attorney so you can comply ASAP.

Should I meet with the SEC voluntarily before they subpoena me?

This is a strategy you should only consider with guidance from your attorney. Speaking voluntarily with the SEC results in you giving up certain rights and protections. It’s possible you accidentally incriminate yourself if you speak to the SEC voluntarily. The lawyer you hire can weigh the pros and cons of meeting with the SEC voluntarily and advise you.

What information can I withhold from the SEC subpoena under attorney-client privilege?

One of the main things protected is your communications with your lawyer. These communications are protected under attorney-client privilege. Any confidential communications between you and your lawyer are protected. It’s important that you assert your Fifth Amendment rights, and never incriminate yourself.

Do I have to testify in person at the SEC or can I do it virtually?

You may be able to testify by phone or Zoom conference. Often, the SEC will insist on in-person interviews. If you hire an attorney to help you with the SEC subpoena, he, or she, can negotiate what this looks like and create a situation that works for both you and the SEC.  Many people prefer testifying virtually, and it’s something which is definitely possible.

Can my lawyer attend my SEC testimony?

Yes, of course! Your lawyer can be present at all times when you’re giving the SEC testimony. It’s their job to object to inappropriate questions and make sure your rights are protected. It would be unwise to schedule an appointment with the SEC where you attorney isn’t there.

What if I don’t have any documents the SEC is requesting?

If you are unable to produce any documents, it’s possible to tell the SEC this. Your lawyer can provide a certificate of no records, signed under penalty of perjury, if you honestly don’t have responsive documents or they no longer exist.

Who pays for the legal fees to fight an SEC subpoena?

If the subpoena is aimed at you, you will likely have to pay. Your employer may cover fees for legal representation if you are subpoenaed regarding company business. But, in reality, you should expect to pay for it on your own.

How much will this cost me?

Experienced SEC enforcement attorneys often charge anywhere from $500-$1,000+ per hour. It all depends on their expertise, experience, and the difficulty of your case. In some cases, they’ll charge a flat rate up for a part of the case, and then more if it goes to a hearing. The total cost will depend on the case complexity and length. But expect a bare minimum of $10,000-$15,000 and budget upwards of $50,000 depending on how long the case takes, and where it ends up.

What happens after I comply with the subpoena?

The SEC will review the information provided and decide if further investigation is needed. If no violations are found, they close the matter. If violations are identified, they begin enforcement proceedings.