I Received an SEC Subpoena — What Should I Do Now?

I Received an SEC Subpoena — What Should I Do Now?

Welcome to Spodek Law Group. We help people facing federal investigations understand what they’re actually dealing with. Most people who receive an SEC subpoena make a critical mistake in the first 72 hours. They treat it like paperwork. They assume someone will explain what’s happening. They wait to “see how serious this is.” That waiting period is often when the most damage gets done.

The document in your hands looks like a request for records. It has official letterhead, a deadline, and a list of documents the Securities and Exchange Commission wants you to produce. What it doesn’t tell you is whether you’re a witness, a subject, or a target. It doesn’t tell you whether the FBI has already opened a parallel criminal investigation. It doesn’t tell you that 27 percent of SEC enforcement actions have simultaneous Department of Justice criminal cases running in the background. The SEC won’t volunteer that information. And there’s a reason for that.

The reason is simple. If you knew you were a target, you’d act differently. You’d invoke your rights. You’d stop talking. You’d hire a federal criminal defense attorney before making any statements. The SEC knows this. So they keep you in the dark as long as possible. Targets invoke rights and hire lawyers. Witnesses cooperate and talk freely. The system prefers the second outcome.

Why This Matters More Than You Think

Heres the part that catches people off guard. The SEC investigation you just learned about may have been running for months. The median time from when the SEC opens an investigation to when they file their first enforcement action is 21.6 months. Almost two years. You didnt know anything was happening, but the clock was already running. Documents were being reviewed. Witnesses were being interviewed. Maybe your coworkers already got calls. Maybe your company’s compliance department already produced records about you.

And heres the number that should keep you up tonight. Twenty-seven percent of SEC enforcement actions have parallel criminal investigations running alongside them. That means more than one in four people who get an SEC subpoena are also being investigated by the DOJ. The SEC cant bring criminal charges. They dont have that authority. But they share everything they find with prosecutors who can. Every document you produce, every statement you make, every explanation you offer to SEC staff – all of it can end up in a federal prosecutors case file.

The SEC collected $8.2 billion in financial remedies in fiscal year 2024. Billion with a B. That’s the highest amount ever recorded. October 2024 was their strongest enforcement month in over two decades. This isnt an agency thats slowing down. If theyve subpoenaed you, your not part of some routine dragnet. Your a specific person who multiple SEC Commissioners decided was worth investigating.

Heres something else that changed recently. In March 2025, the SEC adopted a new rule that fundamentaly altered how investigations work. For the past 15 years, the Director of the Division of Enforcement could unilateraly issue subpoenas. Staff attorneys could compel documents and testimony without any Commissioner approval. That power has now been pulled back. Now a majority of the Commissioners must agree before the SEC formaly opens an investigation that includes subpoena power.

Think about what that means for you. If you recieved a subpoena after March 2025, multiple Commissioners – not just some staff attorney – decided you warranted investigation. The bar for getting a subpoena is now higher. Which means if your holding one, theyve already made a determination that your situation deserves their attention. This isnt some fishing expedition. Someone at the highest level of the SEC signed off on this.

The Status Game They’re Playing

The SEC uses three classifications for people in their investigations. Witnesses, subjects, and targets. A witness is someone who has information the government wants. Prosecutors dont believe the witness committed any crime. A subject is someone whose conduct is within the scope of the investigation. The government thinks the subjects behavior is suspicious, but they havent made a final determination. A target is someone the government has substantial evidence against. If your a target, your probably looking at enforcement action.

Heres the problem. The SEC almost never tells you which category your in. Most of the time they keep things vague so they can gather more information. Receiving a subpoena for documents or a request to testify doesnt confirm your the main focus. It also doesnt mean your just a peripheral witness. You dont know. And thats by design.

Think about what this means strategicaly. The behavior that helps witnesses – answering questions openly, explaining context, providing documents without objection – can absolutley destroy targets. If your actually a target and you behave like a witness, your building the case against yourself. Every helpful explanation becomes a statement. Every clarification becomes something you can be charged with lying about if they decide you got a detail wrong.

The SEC dosent want you to know your status because knowing would change your behavior. That’s not speculation. Thats the stated logic behind how these investigations work. And the classifications arent permanent. Someone who starts as a witness can become a target based on what they say during the investigation. Your status can shift while your still talking.

The Fifth Amendment Trap

When you recieve an SEC subpoena, you’ll also get something called Form 1662. Its titled “Supplemental Information for Persons Requested to Supply Information.” Sounds bureaucratic. But this form contains one of the most important legal landmines in federal investigations.

Form 1662 tells you that you have the right, under the Fifth Amendment, to refuse to give any information that may tend to incriminate you. That sounds protective. Heres the catch. The SEC brings civil cases. In civil cases, when you invoke the Fifth Amendment, the court can draw an “adverse inference.” That means the SEC can argue that your silence implies guilt. The fact that you refused to answer suggests you have something to hide.

But wait. If you testify to the SEC to avoid that adverse inference, everything you say gets shared with the DOJ. So by trying to protect yourself in the civil case, you potentialy waive your Fifth Amendment rights in the criminal case you didnt know existed. You testified to avoid looking guilty to the SEC. Now the DOJ has your statements and can use them against you.

This is the trap that catches people who dont have expereinced counsel. Criminal defense attorneys who only handle state cases miss this. Securities lawyers who’ve never dealt with parallel investigations miss this. Business attorneys who “know someone at the SEC” definately miss this. You need someone who understands how both systems work together, because thats exactly how there designed – to work together against you.

The Timeline That’s Already Running

OK so lets talk about time. People think they can wait and see. Figure out whats going on. Do some research. Ask around. Heres the reality.

The SEC investigation has been open for an average of 21.6 months before you hear about it. If this investigation closes without any enforcement action, it will still take an average of 630 days. Thats almost two years of legal fees, uncertainty, career limbo, and stress – for an investigation that goes nowhere. If it does result in charges, your looking at 2-5 years from subpoena to resolution. Complex cases take longer.

The subpoena itself has two important deadlines. You have 14 days from service to file formal written objections. And the subpoena will specify a production deadline – sometimes weeks, sometimes the SEC demands urgent compliance. Missing either deadline has consequenses.

Heres something nobody talks about though. Extension requests are routinly granted when made professionaly and in good faith. You can typicaly negotiate 14 additional days with a single reasonable request. Sometimes more for complex productions. Multiple extensions are possible if your making demonstratable progress and communicating clearly. The people who face contempt proceedings are almost never people who requested extensions and were denied. Their people who never communicated at all. The system punishes silence, not reasonable requests for accommodation.

But you need an attorney to make those requests. You need someone who knows how these negotiations work. You cant just ignore the deadline and assume everything will be fine.

What Actually Happens If You Dont Respond

Do not ignore an SEC subpoena. This isnt like a parking ticket. This isnt even like a civil lawsuit where you can default and deal with consequenses later. Federal subpoenas carry federal consequenses.

If you fail to comply with what the subpoena is asking for, the SEC can seek a court order to compel compliance. That court order sets the stage for contempt findings if you continue to ignore it. Civil contempt means fines – often $1,000 or more per day – accumulating until you comply. Those fines dont stop. They compound every single day you refuse to cooperate.

For more serious or willful violations, the court may refer your case for criminal contempt under 18 USC 401. Unlike civil contempt, which is designed to force you to act, criminal contempt is punitive. Its meant to punish you for defying the court. Were talking potential jail time. For not responding to paper.

And theres more. Selective production – where you give some documents but intentionaly withhold others – can support obstruction of justice charges. If investigators can show you purposfully withheld specific documents to impede their investigation, thats a seperate criminal offense under 18 USC 1505. Penalties for obstruction can reach five years in federal prison.

Heres the part that really matters. If the SEC needs to enforce its subpoena, it files an application in federal court detailing the nature of their investigation. Documents in federal lawsuits are public. So by refusing to respond, you make the allegations of your involvement in an SEC investigation public. Everyone can see it. Your employer. Your clients. Your competitors. Journalists.

The document destruction trap is even worse. A lot of people, in a moment of panic, think “if I just get rid of this email” or “if I just delete that file” their problems will go away. They wont. Document destruction after recieving a subpoena isnt just bad strategy. Its a seperate federal crime called obstruction of justice. People have faced additional charges for spoliation when the underlying investigation might have resolved favorably. Martha Stewart went to prison not for insider trading but for lying to federal investigators. Michael Flynn was convicted under 18 USC 1001 for false statements – not for any underlying conduct.

Let that sink in. The cover-up became worse then the crime. The orignal investigation might have ended with a fine or a consent decree. Instead, the attempt to minimize led to federal prison. Prosecutors love obstruction charges because there easy to prove. They dont need to establish the underlying violation. They just need to show you knew about the investigation and took steps to impede it. Deleting an email after recieving a subpoena is the kind of evidence prosecutors dream about.

And if you think you can hide the deletion, your wrong. Forensic analysis can recover deleted files. Metadata shows when documents were accessed and modified. IT departments keep backup logs. The SEC has seen every possible attempt to hide destruction, and they know exactly what to look for. The only winning move is not to play that game at all.

The Cooperation Paradox

In fiscal year 2024, 75 percent of public company defendants in SEC enforcement actions had their cooperation formally noted in settled orders or press releases. Thats the highest level of cooperation credited since 2019. The SEC is activley rewarding people who work with them. Cooperation means responding promptly to subpoenas, producing documents without excessive objections, and making witnesses available for testimony.

But heres were it gets complicated. Cooperation done with no strategy can backfire catastroficaly. If you inadvertantly reveal something the SEC can twist into evidence of fraud, you might have just given them the rope to hang you. Cooperation can sometimes reduce penalties, but it must be handled carefully.

There’s an important distinction between cooperation and confession. Cooperating means providing what your legally required to provide in a professional, timely manner. It dosent mean volunteering information nobody asked for. It dosent mean explaining away every suspicious-looking document before anyone raised concerns about it. It definately dosent mean having conversations with SEC staff without your attorney present.

The cooperation credit goes to people who cooperate strategicaly. People who’s attorneys have negotiated scope, documented the cooperation, and ensured their clients got credit for what they provided. The cooperation credit dosent go to people who panicked and talked their way into obstruction charges by providing inconsistant statements.

Theres also something called a Wells Notice that you need to understand. If the SEC staff decides to recommend enforcement action against you, they’ll typicaly send a Wells Notice first. This is basicaly a formal statement that charges are coming. You have 30 days to respond with a Wells Submission – your argument for why the SEC shouldnt proceed. Heres the reality though. Eighty percent of people who recieved a Wells Notice between 2011 and 2013 ended up facing charges. The Wells Notice isnt a warning. Its the last chance to change someones mind before the machinery of enforcement kicks into gear.

The Wells Submission can sometimes persuade staff to modify their recommendation. Fewer charges, lesser violations, narrower scope. Some submissions actualy persuade the staff to reverse their recommendation entirely and decline to proceed. But most dont. And even when staff recommends action, the Commission sometimes declines to authorize it. About 97 percent of SEC cases settle out of court. Settlement talks often start after charges are filed, but you can initiate them during the Wells Process if you have expereinced counsel managing the situation.

Todd Spodek and the team at Spodek Law Group have handled these exact situations. We’ve seen what happens when people try to cooperate without understanding what there cooperating with. The goal isnt to obstruct. The goal is to cooperate intellegently, with full awareness of what each action means for both the civil and potential criminal exposure.

What To Do In The Next 72 Hours

The first 72 hours after recieving an SEC subpoena are the most important. Heres what you need to do.

First, do not destroy any documents. Not emails. Not texts. Not handwritten notes. Not spreadsheets. Nothing. Even if you think its unrelated. Even if your sure its not what their looking for. Document destruction after recieving a subpoena is obstruction. Turn off any automatic deletion policies. Send a litigation hold notice to anyone who might have relevant documents. Preserve everything.

Second, do not contact the SEC directly. Your first instinct might be to call the staff attorney listed on the subpoena to “explain” or “get more information.” Thats a mistake. Anything you say to SEC staff can be used against you. It can also be shared with the DOJ. The SEC staff are not there to help you understand your options. Their there to build a case.

Third, hire a federal criminal defense attorney immediatley. Not a business attorney. Not a securities compliance lawyer. Not your company’s general counsel. You need someone who handles both SEC investigations and DOJ criminal cases. Someone who understands parallel investigations and the Form 1662 trap. Someone who has actualy represented people in your situation.

Fourth, request a copy of the Formal Order of Investigation. You have the right to see this document once served with a subpoena. It tells you which person or entity is the main focus and what conduct is under the SECs microscope. Your attorney should request this immediatly.

Fifth, begin gathering documents but do not produce anything until your attorney reviews them. Privilege issues are critical. If you accidentaly produce one privileged email about a topic, the SEC can argue youve waived privilege on all communications about that topic. Rushing to meet deadlines can create permanent privilege waiver.

You can reach Spodek Law Group at 212-300-5196. We handle SEC investigations nationwide. We understand that your probably terrified right now, and we understand that you need someone who can explain whats actualy happening – not just recite legal procedures. The federal conviction rate for securities fraud is 93 percent. If this goes criminal and they charge you, the outcome is virtualy predetermined. That statistic isnt meant to scare you. Its meant to show why the decisions you make right now matter so much.

The SEC subpoena in your hands may feel like the end of something. It isnt. Its the begining of a process that will determine alot about your future. How you handle the next 72 hours matters more then you realize. The investigation has been running for months. You just found out today. Now your in control of what happens next.

Call us. Lets figure this out together.