You just received a Subpoena from the Securities and Exchange Commission (SEC). What will you have to produce? We regularly represent securities industry professionals and investors who have gotten these Subpoenas, and the reaction is usually the same: people are nervous and concerned. How will this affect your business, and how what will it take the comply?
Getting an SEC Subpoena is a serious matter, and it is imperative that you carefully comply in a timely manner. Subpoenas will typically require you to produce documents or testify, or both. Your goal should always to limit your involvement with the federal authorities, and this begins with your production of documents in response to the Subpoena.
The first step is to remember that just because you received a Subpoena does not mean you automatically did something wrong. You may not be the SEC’s target, but may be someone the Commission believes has information related to another person or business. The SEC is not obligated to tell you whether they view you as a target or a witness, and you should not assume you are a target.
The second step in responding to the Subpoena is to note the due date for production. Ignoring the deadline and letting it pass may prompt an immediate and aggressive follow up from the Commission. Sometimes an extension may be negotiated, but delay will usually just extend the time you are subject to the Subpoena. Remember, your response does not end the process. The Commission may consider your Subpoena response for weeks or months before they decide whether further investigation is necessary.
You must then amass the documents that respond to the Subpoena – Do not destroy any anything!!! If the SEC finds out you destroyed documents that would have been responsive to the Subpoena, you could create more problems for yourself with an obstruction charge. It is very important to lawfully respond to the Subpoena to show the Commission there is no need for further investigation.
Often times Subpoenas appear to be broadly worded, but really only call for a limited set of documents or information. Sometimes a call to the SEC investigator or attorney will help narrow the set of documents you are required produce.
Finally, ensure that you fully and timely comply with the Subpoena by sending the SEC Staff member the documents and information in an orderly way. You must make sure you produce all of the documents that you are required to – your response should be complete, but you are not obligated to volunteer information that is not called for. It is imperative that your response includes any legal objections that you may be entitled to, so you should make sure you hire knowledgeable securities law counsel.