Preparing for SEC Investigative Testimony.

Last Updated on: 4th August 2026, 01:33 am

An SEC subpoena can compel both documents and sworn investigative testimony. While receiving a subpoena to testify before the SEC does not necessarily mean you are a target of the investigation or have done anything wrong, answers given under the SEC’s authority can be used in both the SEC’s enforcement proceedings and any parallel proceedings.

While the Commission typically delegates authority to issue investigative subpoenas and subpoenas to testify to its Division of Enforcement staff, subpoenas cannot be issued during the SEC’s “matter under inquiry” (or “MUI”) stage, where the staff must instead rely on voluntary production.

1. Matters Under Inquiry

The SEC refers to this as a preliminary step in its investigative process. When the SEC opens an MUI, a formal order of investigation is not required, and the SEC cannot issue subpoenas for testimony or production of documents. By rule, an MUI should only last 60 days, at which point the SEC must determine if there is evidence of a violation of the federal securities laws. If the SEC finds evidence of a violation, it can seek a formal order from the commission.

Because an MUI is only a preliminary inquiry, staff may not issue subpoenas during an MUI and must instead request information voluntarily until the Commission issues a formal order of investigation. If the SEC closes an MUI without filing charges, it does not destroy the records it gathered; since 2010 the SEC has been required to retain closed MUI files as federal records under a National Archives-approved disposition schedule.

2. Formal Order of Investigation

A formal order authorizes designated SEC staff members to issue investigative subpoenas. A formal order also identifies the possible violations at issue and potential suspects. It does not, however, find that any individual or entity is liable or state that the conduct at issue violates any rule or law.

3. Investigating the Recipient of an SEC Subpoena

If a recipient does not comply with a subpoena, federal courts can enforce the subpoena, and the individual who failed to comply can face civil or criminal penalties. Additionally, because there is no universal end date for SEC investigations, inquiries can go on for years.

How is SEC testimony different from an ordinary deposition?

The Federal Rule of Civil Procedure that governs depositions (FRCP 30) generally does not apply in SEC investigations. Instead, the SEC has its own rules (specifically, 17 C.F.R. Part 203), and SEC agents will rely on these rules when conducting an SEC investigation. As a result, SEC investigations can be very different from typical civil litigation; and while certain aspects of the process may feel similar to a standard deposition, the unique and limited protections available to SEC witnesses can present significant risks.

Some notable differences between SEC investigations and depositions include:

• In formal SEC proceedings, counsel can advise and accompany witnesses (17 C.F.R. § 203.7). Counsel can, however, not participate actively in the testimony.
• SEC witnesses can object to questions based on the privilege against self-incrimination. However, unlike in depositions, witnesses may refuse to answer questions on privilege grounds as noted above, but subject to that limitation they are expected to answer the staff's questions, and a witness who refuses without a valid privilege can be held in contempt once a federal court enforces the subpoena. Objections based on relevance or burden under the Federal Rules of Evidence will not generally be sufficient grounds for refusing to answer a question from the commission.
• In depositions, counsel can ask the court to stop the record or the parties to object on the record. The commission does have the authority to stop a witness’s testimony upon a timely request for a break, and counsel can present relevant information to the counsel conducting the inquiry, but the Commission’s process is far less flexible than the process that applies to civil litigation.
• While the SEC has the discretion to allow witnesses’ counsel to present additional information on the record if they choose, the rules state that the SEC “may permit the presence of others” only in addition to the witness’s counsel. In contrast, with a deposition, witnesses may be accompanied by their lawyers, legal assistants, assistants, court reporters, videographers, other parties to the lawsuit, and witnesses.
• SEC witnesses may be subjected to compelled answers. In depositions, each party to the lawsuit has equal access to question the opposing party and the court’s ability to intervene when necessary. However, when a witness is subpoenaed to give investigative testimony, the only party present (outside of the SEC) is the witness themselves and the witness’s counsel. As a result, SEC investigators are never faced with questions or counter-questions from the witness’s side that might give the witness an opportunity to clarify or to defend themselves.

Q. Can I Refuse to Attend?

While an SEC subpoena is a compelling document, and failure to comply with one can be unlawful conduct, it is not necessarily the end of the road for anyone involved in a federal investigation. Depending on the circumstances, the SEC will reach out to conduct its informal inquiry without the need to use its subpoena power, and the individuals who can help them may voluntarily cooperate. In this scenario, witnesses can end their interview and leave the inquiry, as they are not under any subpoena or other compulsory legal process.

Q. What Should I Do if I Am Asked to Cooperate?

How should I prepare with counsel before testifying?

If you are subpoenaed to give investigative testimony, your counsel will need to obtain the subpoena for your investigative testimony, if this is not already in the possession of your counsel. Your counsel will want to review the subpoena, the documents you have already provided (or that are in the possession of the SEC), and other relevant records, and, if possible, get in touch with the SEC agents in charge of the case to determine the scope of your testimony and seek to limit the investigation. At the SEC hearing, your counsel will sit by you and will be available to intervene or ask for a break if your counsel believes it is necessary. Your counsel can discuss the questions with you during breaks as well. The SEC determines the scope of the testimony, and witnesses must answer nonprivileged questions within that scope truthfully. However, in a federal investigation, your answers to the SEC will shape the next steps of the case. Therefore, once you speak with the investigators, you will not be able to take back anything you have said, and your testimony will become part of the record which may result in you being subpoenaed to give additional testimony.

Q. Is it Possible for the SEC to Ask Me to Return to Give Further Testimony?

Yes, it is possible for the SEC to ask you to return after your first testimony session. This may happen if your testimony gives rise to new information that requires you to provide additional evidence, the documents you have provided are insufficient, or the investigator needs to clarify something you previously said. Testimony may take several hours or may continue for multiple days. Your lawyer will be able to help you know if it will be necessary for you to return to the SEC.

Q. When Should I and My Company Begin Preserving Information?

When it is reasonably anticipated that the SEC will seek information or conduct an inquiry, you and your company should begin preserving any documents and all other forms of relevant information. This includes, but is not limited to, emails, text messages, electronic data, and handwritten notes. If information is lost, deleted, or destroyed after the SEC has obtained evidence to indicate that an inquiry is necessary, it can lead to a charge of spoliation of evidence.

Q. Can a Company Attorney Represent Employees or Executives During an SEC Investigation?

Company counsel represents the company or corporation that is the target of a federal investigation. Company counsel may represent the individuals involved in the SEC investigation only if the representation is ethically permissible, including where any conflict is consentable and properly addressed. If your company attorney is engaged by the corporation and you are an employee or executive who wants to engage them, you will need to check with the attorney to ensure that they can provide you with representation without a conflict of interest. If there is a conflict of interest, then you and your company will need to retain separate counsel.

Q. Will My Lawyer’s Advice to My Company Be Privileged?

Advice from a lawyer to a client is generally privileged in most contexts. However, ordinary business advice given by your company’s lawyer may not be privileged. Additionally, in most instances, the attorney-client privilege belongs to the entity or corporation and not the employees or executives that it covers. This means that the company can waive your privilege if it thinks it is in the best interest of the company to do so. However, attorney-client privilege is still available for confidential communications that you make to your lawyer when seeking legal advice about your testimony, and this privilege can protect you during the SEC’s inquiry and any parallel proceedings.

If any of this describes your situation, it is worth talking it through with counsel. Spodek Law Group can be reached at 212-300-5196.

When should I consider invoking the Fifth Amendment?

Q. Will the SEC Give Me Documentation About How it Uses the Evidence It Collects?

Yes, the SEC provides a document entitled “Form 1662, Supplemental Information for Persons Requested to Supply Information Voluntarily or Directed to Supply Information Pursuant to a Commission Subpoena” that explains the use of information and records supplied to the Commission in the context of an investigation. It has three sections. The first section identifies the type of records or information the SEC is seeking; the second section explains how the SEC will use the information collected; and the third section explains the SEC’s obligation to keep records and information confidential. The SEC may share evidence collected from its investigation with other agencies, including regulatory agencies, and the SEC also works with criminal prosecutors when it believes a criminal prosecution is necessary.

Q. Is the SEC Investigating Me for a Criminal Violation?

The SEC only pursues civil enforcement actions. The U.S. Department of Justice (DOJ) controls federal criminal prosecutions, and criminal charges require proof beyond a reasonable doubt. In SEC investigations, the SEC can initiate civil enforcement proceedings if it believes it has enough evidence to pursue a civil enforcement action. However, if the SEC determines there is evidence of a criminal violation, it can work with the DOJ and other criminal prosecutors to initiate parallel criminal investigations.

Q. If I Invoke the Fifth Amendment, Can the SEC Use This to Find That I Violated the Law?

A witness who invokes the Fifth Amendment can be asked to provide specific information that is not protected by the Fifth Amendment. If a witness refuses to answer questions on the grounds that their answers may be incriminating, the SEC may still pursue its inquiry. If a civil lawsuit arises out of an SEC investigation and the witness invokes the Fifth Amendment, the jury can draw an adverse inference against the individual who refused to answer. However, invoking the Fifth Amendment does not, by itself, establish that a securities-law violation occurred.

Q. When Do I Have the Right to Invoke the Fifth Amendment?

When a witness invokes the Fifth Amendment, they generally must do so on a question-by-question basis. For every potentially incriminating question, the witness must raise the privilege separately. A witness is protected by the privilege against self-incrimination when testifying if the testimony could potentially be used in a criminal prosecution, regardless of whether it would directly prove any particular element of the crime. As long as an answer is a link in a chain of evidence that could lead to a criminal prosecution, the privilege applies.

Q. Is It Possible to Stop an SEC Investigation if I Am Subject to a Parallel Criminal Investigation?

If you are being investigated by the SEC and DOJ for the same conduct, it is possible to pause the SEC investigation. However, if the two investigations are not related, the SEC investigation will likely continue. If an SEC investigation is initiated after a DOJ investigation, it is possible to try to have the SEC investigation stayed. Parallel criminal proceedings do not necessarily halt the SEC investigation, unless the conduct at issue is the same. If the criminal prosecution ends in a conviction, then it becomes very easy for the SEC to pursue its civil enforcement action based on the findings in the criminal case.

Along with the civil enforcement proceeding, there is a potential for a civil complaint to be filed in a federal district court. If you get a judgment in a civil case or you settle the case through a plea agreement, this will also lead to the SEC taking action. If you reach a settlement with the SEC, it might contain a “no admission” clause which prevents you from making statements about your case that would imply that you did commit a violation of the law. Your lawyer will be able to advise you on all these procedures and determine how best to approach a potential SEC enforcement action.

Q. Can I Review the Transcript of My SEC Testimony?

While the Federal Rules of Civil Procedure (specifically, FRCP 30(e)) allow for transcript correction in depositions, the rules for SEC investigations do not explicitly allow for correction of a witness’s transcript. However, it does allow for witnesses’ review and inspection of their transcripts. Witnesses who have given testimony to the SEC can inspect their transcripts in the SEC’s offices. Witnesses can obtain copies of the transcript by written request, and they have to pay fees to obtain the transcript copies. In non-public formal investigations, the Commission may deny a request for copies of the transcript if the Commission finds that there is “good cause” for the denial.

The Commission may decline to issue copies of the testimony transcript in cases where the SEC finds good reason to keep the testimony confidential. For example, if providing you with a copy of the transcript would compromise an active investigation, then the SEC can deny your request for a transcript copy. This is why it is important to get a lawyer to represent you during your SEC investigation. Your lawyer can discuss the issue with the SEC to seek the best possible solution for obtaining the transcript copies you need.

While witnesses may be able to review and correct inaccuracies, material lies told to SEC investigators can lead to charges under 18 U.S.C. § 1001. Under this statute, it is a crime to knowingly and willfully make any materially false or fraudulent statement or representation during an investigation by the federal government. This includes making statements that you know are not true, making a statement that contains an omission to make the statement sound true when it is not, or providing false documents. The government must prove that you made the false statement, that it was within a government department’s jurisdiction, that it was knowingly and willfully made, and that it was materially false. While any minor corrections to a testimony transcript do not constitute an offense under 18 U.S.C. § 1001, substantial deviations from the facts in your statement can expose you to the criminal charges.

Q. What Other Records Can I Obtain After Giving Testimony to the SEC?

The SEC’s rules also allow for witness access to a copy of the transcript as well as a copy of the exhibits you have provided to the SEC during your testimony. Witnesses who can request to obtain their transcript and exhibits must pay the costs and have written authorization to obtain these copies. The copy request includes any exhibit that the witness may have submitted to the SEC during the testimony. The SEC may deny access to the transcript and exhibits when it decides that “good cause exists for non-disclosure” (17 C.F.R. § 203.6(c)). While witnesses do not have the right to receive a copy of their transcript or of every exhibit they received from the SEC during the testimony, it is important to check your SEC testimony transcript before testifying at a trial or another investigation.

Q. If I Am Asked to Correct My Testimony Later, What Does That Mean?

If a witness is asked to correct their testimony, it does not mean that the witness will have to face criminal charges. However, any corrections that a witness makes to a previous statement will not automatically extinguish a witness’s exposure under 18 U.S.C. § 1001. A witness’s lawyer will help the witness decide whether making a correction could increase the witness’s exposure under the statute. This is why it is important to involve a lawyer at the start of the investigation.

Contact a Federal Criminal Defense Attorney

Nothing here is legal advice, and the details of your case matter. Todd Spodek and Spodek Law Group take federal criminal and white collar cases nationwide, from offices in New York, Brooklyn, Queens and Los Angeles. You can reach the firm at 212-300-5196.