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Can I Negotiate with the SEC Over the Scope of a Subpoena?
CAN I NEGOTIATE WITH THE SEC OVER THE SCOPE OF A SUBPOENA
If you’re on our website, it’s likely you or someone you know has just been served with an SEC subpoena – and needs to figure out what to do next. Getting an SEC subpoena can be a scary process. Many people aren’t aware of what the SEC does, when it gets involved, and what triggers it to get involved.
The Securities and Exchange Commission Has Broad Authority To Handle Things
The Securities and Exchange Commission (SEC) is responsible for regulating the securities markets under the Securities Act of 1933 and the Securities Exchange Act of 1934. Their administrative powers include issuing subpoenas to investigate potential violations of federal securities laws. If you’re served with such a subpoena, it can feel overwhelming because it means the SEC thinks you broke the law, when trading stocks and options. But does that mean you have zero say in how broad this request is?
Not Necessarily.
Many individuals and companies underestimate the fact that you can attempt to negotiate with the SEC over the scope of its subpoenas – at times like this, you want an attorney responding on your behalf. It won’t always be straightforward, and there are no guarantees, but in many situations, regulators may be open to adjustments — especially if the subpoena is overly broad or places an undue burden on your day-to-day operations. The SEC’s goal is to get information, so they’re naturally going to send the most broad subpoena over, as possible.
KEY QUESTION: WHY NEGOTIATE?
Isn’t the SEC all-powerful? Of course, the SEC has wide-ranging investigative authority. They can big civil penalties for noncompliance, and can send criminal referrals to the Department of Justice if the facts warrant it. Nevertheless, the SEC often appreciates honest cooperation. Negotiating in good faith over the scope of documents, the timeframe, or the type of information sought can demonstrate that you’re cooperative, serious about compliance, and not trying to obstruct an investigation. Most importantly, it can show the SEC you probably have nothing to hide.
AS SEEN ON
Major Government Websites provide guidance on the SEC’s process. For more in-depth details on the investigative procedure, you can visit the official SEC Enforcement page.
OVER 50 YEARS OF COMBINED EXPERIENCE
At Spodek Law Group, we have federal defense attorneys who understand how SEC inquiries go. We are known for providing the best possible customer service to every single client. We can help you work with the SEC to narrow the scope of the subpoena, and—if appropriate—ask for time extensions or work to reduce the scope of the types of documents requested. The SEC subpoena request cannot be too burdensome, or unfair.
COMMON PENALTIES AND CRIMINAL CONSEQUENCES
What’s at stake here? Potentially a lot – there can be a lot of different penalties, etc. If the SEC believes your company, or you, engaged in fraud, insider trading, or other violations:
- You can face civil penalties or disgorgement of profits (see 15 U.S.C. § 78u(d)).
- You risk injunctions that can stop your business activities.
- There’s always the possibility of a referral to federal prosecutors leading to criminal charges if your case involves willful violations of securities laws.
CAN I REALLY LIMIT THE SCOPE OF WHAT I PRODUCE?
Yes, you can attempt to do so. Sometimes, the SEC scope is too vast – and it’s ok to push back. We frequently see overbroad requests that ask for every single email, document, or record within a five-year window. If that’s overly burdensome, we can argue to limit the scope. Often people simply don’t have the records, emails get deleted, etc This may involve:
- Timeframe Restrictions: Instead of producing five years of records, maybe you only produce one or two years most relevant to the investigation.
- Subject or Keyword Limitations: Reducing the request to specific subjects, transactions, or parties in question.
- Staged Productions: If the SEC insists on a large volume of information, we could propose a phased production schedule to reduce administrative chaos.
STRATEGIES WE USE TO HELP YOU
Our NYC Criminal Lawyers have experience handling tough investigations nationwide, and while an SEC subpoena can often be civil in nature, it can also lead to criminal referrals to other agencies such as the FBI, Attorney General, etc. We have a few strategies if you’re trying to negotiate:
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Early Dialogue
We can approach the SEC staff early on, explain the hurdles, and show you are prepared to cooperate fully – just in a more efficient manner. Proactive communication can help you build trust. The more the SEC feels you are open to transparent talks, the easier it is to get a resolution from the SEC that feels fair. -
Legal Grounds for Objection
Sometimes, the SEC’s request might be irrelevant, duplicative, or legally infirm. We can file a motion to quash or modify the subpoena if there are strong grounds under Rule 45 of the Federal Rules of Civil Procedure. The SEC might still press for the documents, but it opens the door to further dialogue and negotiations regarding the scope of the discussion of which documents need to be given. -
Confidentiality Protections
We can negotiate specific confidentiality agreements with the SEC. For example, we might ask the SEC for “appropriate confidentiality treatment” under FOIA Exemption 4 (see https://www.sec.gov/foia). This ensures that your sensitive business data is protected to the fullest extent possible. -
Highlighting Undue Burden
If the subpoena requires an expensive, time-intensive data collection effort, we can highlight the “undue burden” factor. The SEC may be willing to reduce or tailor its demands once they understand the scale of compliance costs.
DEDICATED
Regardless of your situation, know that our law firm stands ready to help you.
WHAT IF YOU DON’T COOPERATE?
Failing to comply with the SEC can result in court enforcement actions, contempt proceedings, and negative inferences if the matter progresses. In some cases, refusal to cooperate may signal to the SEC that more aggressive tactics—like referrals to federal prosecutors—are necessary.
In the worst-case scenario, ignoring an SEC subpoena could lead to obstruction charges, which carry their own severe penalties. That’s why we believe in a strategy of cooperation paired with smart negotiation.
YES, WE CAN HELP YOU
Spodek Law Group has the expertise you need. We’ve handled complex white collar matters, high-stakes federal cases, and everything in between. Whether you’re a major corporation, a growing startup, or an individual under scrutiny, our criminal defense lawyers can protect you.
We’re available 24/7, to provide a risk free consultation. We work tirelessly to get you the best possible outcome. Our track record speaks for itself: we’ve assisted clients nationwide – from Los Angeles to NYC – navigate challenging investigations, minimize exposure, and reduce negative fallout.
HOW TO GET STARTED
If you’ve received an SEC subpoena, time is running. Here’s what you should do immediately:
- Contact a Dedicated Attorney – The SEC rarely issues subpoenas as a fishing expedition. They are serious about your involvement in a potential violation. They have a strong likelihood in their head that you committed a crime, now they’re trying to confirm it with documents only you have.
- Gather Relevant Documents – Before you produce anything, secure your records, note the key individuals involved, and preserve evidence so that no spoliation accusations can arise. You don’t want to be accused of interfering with the investigation, ever.
- Schedule a Consultation – Set up a meeting with us to discuss your options. During this consultation, we’ll identify your goals, review the subpoena, and plan a course of action.
LET’S PROTECT YOUR FUTURE
Negotiating with the SEC doesn’t mean you’re hiding something. Rather, it’s about shaping the investigation in a balanced way, avoiding unnecessary burdens, and demonstrating your willingness to comply responsibly.
SPODEK LAW GROUP
Committed. Unafraid. Top Rated.