FEDERAL CRIMINAL LAWYERS

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

Welcome to Spodek Law Group. We understand how terrifying it is when an SEC subpoena arrives at your door. Our goal is to help you understand exactly what you’re facing – because the reality is far more serious than most people realize. This isn’t just a document request. This is the government telling you they’ve been watching, and now they want answers.

The subpoena looks like a civil document request. It references the Securities and Exchange Commission. It asks for emails, documents, trading records. Nothing about criminal charges, nothing about prison, nothing that suggests your freedom is at risk. That’s by design. The SEC has learned that people cooperate more freely when they think they’re dealing with a regulatory matter rather than a criminal investigation. And cooperation is exactly what they want.

Here’s what nobody tells you: the investigation didn’t start when you received this document. It started months ago – sometimes years ago. The SEC has already reviewed your trading patterns, already obtained records from your broker, already interviewed witnesses, already built a preliminary case against you. The subpoena isn’t the beginning. It’s the middle. And by the time you’re reading this, federal prosecutors at the Department of Justice may already be building a parallel criminal case using the same evidence the SEC is gathering.

What an SEC Subpoena Actually Means

The average SEC investigation runs 22.8 months before any enforcement action. Complex cases average 34 months. Your not responding to something that just happened – your responding to something thats been building for a very long time while you had no idea it existed. The investigaters have been working this case since before you knew there investigation existed.

Think about what that means. Every trade you made, every email you sent, every document you signed has already been reviewed by investigators who specialize in finding problems. They know the answers to the questions they’re going to ask you. This isnt a fishing expedition were they’re hoping to find something. This is a targeted investigation were they’ve already found enough to justify formal process – and you are the target.

Heres what most people dont realize: the SEC dosent issue subpoenas casualy. Before your subpoena was signed, investigators had to demonstrate to there supervisors that the case warranted formal compulsory process. They had to show evidence. They had to justify the resource allocation. They had to explain why you specificaly needed to produce documents or testify. The subpoena isnt the start of an investigation – its the middle of one that has already determined your worth pursuing.

In March 2025, the SEC changed its rules for issuing subpoenas. They now require full Commission approval – not just staff authorization. That sounds like a minor procedural detail. Its not. It means your investigation has already risen to the level where multiple Commissioners believe there’s something worth pursuing. The bar for issuing subpoenas got higher. Your case cleared that bar.

Heres the thing that keeps defense attorneys up at night: approximately 27% of SEC investigations have parallel criminal investigations running simultaneously at the Department of Justice. You wont know which category your in. The SEC dosent tell you. The DOJ dosent announce it. You find out when federal agents show up at your door with handcuffs, or when you receive a target letter from a grand jury, or when your lawyer gets a call from an Assistant United States Attorney.

The investigation thats been running for months or years – the one you just learned about today – may already have a criminal track that you know nothing about. And everything you do from this moment forward feeds into both tracks.

The Parallel Investigation You Dont Know About

Most people think the SEC and DOJ operate seperately. Civil enforcement over here, criminal prosecution over there. Two different agencies, two different processes, two different concerns. The reality is completly different.

Theres a formal mechanism called “Access Requests” that allows DOJ prosecutors to obtain every piece of evidence the SEC has gathered. Every document you produce. Every statement you make. Every answer you give in testimony. Every email you hand over. It all flows directly from the SEC to federal prosecutors who may be building a criminal case against you at the same exact time.

Your treating this as a civil matter because thats what the paperwork says. Meanwhile, an Assistant United States Attorney may already be reviewing your SEC testimony, looking for inconsistencies, looking for false statements, looking for anything that can become a federal criminal charge. The civil investigation is feeding the criminal one, and you have no way to know.

Ive seen cases were people answer SEC questions honestly – or so they think – and then get indicted for making false statements under 18 USC 1001. Not for the underlying securities violation. Not for insider trading. Not for fraud. For saying something during the SEC interview that didnt match documents they produced later. For misremembering a date. For characterizing a conversation differently than an email described it.

Thats exactley what happened to Martha Stewart. She didnt go to prison for insider trading. She was actualy acquitted on that charge. She went to prison for lying during an investigation – for making false statements to federal investigators who were looking into allegations that ultimately werent proven. Five months in federal prison. For statements made during what she probly thought was a routine inquiry.

Read that again. Martha Stewart went to prison for lying about allegations she was found not guilty of. The underlying conduct wasnt criminal. The statements during the investigation were.

The Trap Built Into Form 1662

When you receive an SEC subpoena, you also receive something called Form 1662. Its a government document that most people glance at and move on from. They want to get to the actual subpoena, to understand what documents are being requested, to figure out what this is about. Skipping Form 1662 is a mistake that has destroyed careers and put people in prison.

Form 1662 contains whats called a “Routine Uses” statement. It tells you, in plain bureaucratic language, that any information you provide may be used in “any federal civil or criminal proceeding.” It literaly warns you that your cooperation will be shared with criminal prosecutors. The government hands you a document that says everything you tell us can be used to send you to prison.

And most people sign it without reading it carefully. Then they sit down for testimony and explain their way into an indictment.

The irony is brutal. The warning is right there. But its buried in bureaucratic language that nobody reads, and the investigator on the phone sounds friendly and reasonable, and you want to clear this up quickly and get back to your life. So you talk. And talk. And talk. And every word becomes evidence in proceedings you didnt know existed.

Terraform Labs learned this the hard way. They tried to evade SEC subpoenas, thinking they could outmanuever the process through legal technicalities. The result wasnt clever legal strategy – it was SEC press releases announcing enforcement actions, massive media coverage with their name attached, and an enforcement action that made there situation exponentialy worse than if they had engaged properly from the start.

Once you receive an SEC subpoena, there is no ignoring it, no evading it, no pretending it doesnt exist. The only question is whether you respond strategically with experienced counsel or whether you respond in ways that make everything worse.

Why “Cooperating” Often Makes It Worse

Your instinct is to cooperate. Innocent people explain. They want to clear their name. They belive that if they just show the SEC they did nothing wrong, if they just answer the questions honestly, if they just produce all the documents, this will all go away and they can move on with their lives.

Heres the reality: cooperation builds the government’s case against you.

Every document you produce gives investigators more evidence to work with. Every statement you make gets compared against those documents for inconsistencies. Every inconsistency – even innocent mistakes in recollection, even different characterizations of the same event – becomes potential criminal exposure under 18 USC 1001.

The SEC investigator isnt your friend. There trained to build cases. There job performance is measured by enforcement actions. The friendly tone, the casual questions, the “help us understand what happened” framing – its all designed to make you comfortable enough to keep talking. And you keep talking. And the transcript grows longer. And when DOJ requests that transcript through an Access Request, they have exactly what they need to build a criminal case.

Consider the math of this situation. If you say nothing, they have the documents but no statements from you to contradict. If you explain everything in detail, they have the documents AND your statements AND every place were your recollection differs from the paper trail. Which scenario is worse for the prosecution? Which scenario gives them more ammunition?

Heres the part that makes experienced defense lawyers cringe: people think there being helpfull. They think if they just explain the context, if they just clarify what they ment, if they just provide more information, somehow this will all work out. But every word you say becomes evidence. Every clarification becomes another statement that can be compared against documents. Every attempt to be helpfull becomes another opportunity to create inconsistancies that prosecutors can use to charge you with making false statements. The investigation that started as securities fraud can end with seperate obstruction charges that carry there own federal prison sentences.

And yet people keep talking. Becuase they think cooperation helps. Becuase there lawyer – if they even have one at this point – hasnt explained that the SEC interview is functionaly a criminal interrogation disguised as a civil proceeding. Becuase they dont understand that every word can and will be used against them in ways they never anticipated. The irony is that the more articulate you are, the more detail you provide, the more ammunition you hand to prosecutors who are looking for any inconsistancy between what you said and what the documents show.

The Fifth Amendment Paradox

Now your thinking: I’ll invoke my Fifth Amendment right against self-incrimination. Thats what the Constitution is for. That protects me, right?

It protects you criminally. It destroys you professionaly.

FINRA – the Financial Industry Regulatory Authority – has what amounts to an automatic bar provision for anyone who invokes the Fifth Amendment in a regulatory proceeding. If you work in the securities industry, if your career depends on maintaining your registration, invoking your constitutional rights means you cant work in your industry anymore. Your career is over. Your income disappears. Your professional identity that you spent decades building is gone.

Think about what that means. The Constitution gives you the right to remain silent. The regulatory system punishes you for exercising that right. The choice the system forces on you is impossible.

OK so lets talk about what this actualy looks like in practice. You invoke the Fifth. The SEC cant force you to testify anymore – thats constitutionaly protected. But FINRA isnt the government. Its a self-regulatory organization. And when you signed up to work in the securities industry, you agreed to there rules. One of those rules says you have to cooperate with regulatory inquiries. Another rule says failing to cooperate is grounds for a bar. So you exercised your constitutional right, and now you cant work in finance anymore. Thats the system.

So your choices are:

Option A: Testify and potentialy hand prosecutors the evidence they need to convict you of federal crimes.

Option B: Invoke the Fifth, lose the civil case by adverse inference, get barred from the securities industry by FINRA, and watch your career disappear forever – while protecting yourself criminaly.

There is no Option C. There is no good option. There is only damage control. This is were experienced counsel makes the difference – finding the narrow path between criminal exposure and career destruction, understanding which questions to answer and which to decline, navigating the impossible choice the system has created for people in your exact situation.

Document Production – Where Cases Are Won or Lost

The subpoena demands documents. Your instinct is to gather everything and hand it over completely. Or maybe your instinct is to “clean up” a few things first, to delete some emails that look bad out of context, to organize documents in ways that present a better picture.

If you delete, destroy, or alter any document after receiving an SEC subpoena, you have committed obstruction of justice under 18 USC 1512. Maximum penalty: 20 years in federal prison. This is not negotiable, not flexible, not subject to good intentions.

Twenty years. For deleting an email. For shredding documents. For asking your assistant to clean up files. The underlying securities violation your being investigated for might carry a five-year maximum. Obstruction carries twenty. The cover-up becomes worse than the crime, every single time.

Anthony Coronati ignored an SEC subpoena entirely. He thought he could simply not respond, that maybe it would go away, that maybe they would move on to easier targets. The result: contempt proceedings, a $50,000 bond just to stay out of jail while the investigation continued, and a case that became infinitly more complicated than it needed to be. He didnt avoid anything. He made everything worse.

Document production strategy is critical to how your case develops. What you produce, how you produce it, when you produce it, what you assert privilege over, how you organize and present materials – these decisions shape the entire trajectory of your case going forward. Get them wrong and you hand the government additional charges. Get them right and you maintain some measure of control over a situation designed to strip control away from you.

Heres something else people dont think about: the way you organize documents tells investigators something. If you produce everything in a chaotic mess, they wonder what your trying to hide in the noise. If you produce everything perfectly organized, they wonder if you curated it. If you produce too quickly, they think you didnt review for privilege. If you take too long, they think your stalling. Every choice sends a signal. Every signal gets interpreted. And you wont know how there interpreting it until its too late.

The privledge review alone can determine outcomes. Attorney-client privledge protects certain communications. Work product doctrine protects certain documents. But the lines arent always clear. Produce something privledged and you may have waived privledge over an entire category of documents. Withhold something thats not actualy privledged and you face spoliation allegations. These technical decisions – made under time pressure, with incomplete information – can make or break federal cases.

At Spodek Law Group, Todd Spodek and our team have navigated countless SEC investigations. We understand that the document production phase isnt administrative busywork – its the foundation of everything that follows. Its were cases are won or lost before anyone steps into a courtroom.

What To Do In The First 72 Hours

The moment you receive an SEC subpoena, the clock starts. What you do in the first 72 hours determines the trajectory of everything that follows for months or years to come.

Hour 0-24: Do not talk to anyone from the SEC or DOJ. Do not answer questions. Do not “help them understand.” Do not explain what you think happened. Do not try to clear up misunderstandings. Politely decline to discuss anything substantive and immediately contact experienced securities defense counsel who handles federal matters.

Hour 24-48: Preserve all documents. Every email, every text message, every file, every note. Issue a litigation hold to anyone in your organization who might have relevant documents. Document destruction – even routine, automated deletion that happens according to normal business practices – becomes obstruction once you know an investigation exists.

Hour 48-72: Begin working with your attorney to understand the scope of the investigation. What are they really looking for? What parallel proceedings might exist? Whats your actual exposure – civil and criminal? What strategic options do you have for responding?

After 72 hours, the rush continues. Deadlines for document production, potential testimony dates, strategic decisions about cooperation versus invocation. But those first three days set the foundation. They determine whether your responding thoughtfully and strategicaly or reacting in panic and making mistakes you cant take back.

Heres the uncomfortable truth: the system is designed to catch people who think they can handle this themselves. It catches people who cooperate without counsel. It catches people who think a friendly phone call from an investigator is just a conversation. It catches people who dont read Form 1662 carefully. It catches people who think civil means definitely not criminal. It catches people who delete documents. It catches people who talk too much. It catches people who stay silent when they shouldnt.

The SEC subpoena in your hands isnt a request for documents. Its the visible portion of an investigation that may already include criminal exposure. How you respond in the next 72 hours could determine whether this ends with a settlement and a fine, an enforcement action and industry bar, or a federal indictment and prison time.

At Spodek Law Group, we’ve seen every version of this story. We know what happens when people respond wrong – the cases that became federal prosecutions because of statements made in the first week. We know what happens when they respond right – the investigations that ended without charges because strategy was sound from day one. If you’ve received an SEC subpoena, call us at 212-300-5196. Time matters. Your future depends on decisions you’re making right now.