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SEC Subpoenas & Regulatory Investigations

It can be unsettling to receive a subpoena or request for information from any governmental or regulatory authority, such as the SEC. Whether you are an industry participant or just a person in the United States, the SEC can and will subpoena you if you are potentially a witness in or a target of an SEC investigation or complaint. Malecki Law’s team of experienced New York SEC regulatory attorneys are here help anyone who receives an SEC subpoena.

SEC subpoenas are a common part of the securities regulatory landscape. Anyone, anywhere, can be subpoenaed by the SEC if they worked at a company that is under investigation, traded in a stock that may seem to be manipulated, is believed to have traded on inside information and under many other scenarios. The SEC does not only have jurisdiction over the financial world’s employees, but it can also subpoena anyone who is potentially the target of or may have helpful information related to an SEC investigation. 

SEC subpoenas also require witnesses to give documents and possibly testimony. If you are served with a subpoena, it will contain the details regarding where and when you need to testify, but the subpoena will not have any detailed information regarding what you are being called to testify about. Prior to giving testimony, you could be asked to submit documents regarding certain businesses, individuals, transactions, etc., and these documents, along with those submitted by others, will potentially come up during the testimony.

Individuals are typically contacted by the SEC for two reasons: 1) You are the subject of its investigation; or 2) They believe you may have valuable information related to its investigation of an entity or someone else. In either case, you may be subpoenaed to provide documents (called a subpoena “duces tecum”) or to testify (called a subpoena “ad testificandum”), or both.

The SEC starts with something called a “Formal Order of Investigation” and Malecki Law gets that document immediately upon engagement. It tells us a little more about what is going on. Then we call the SEC and try to get as much information as possible. Malecki Law will also work with the SEC to narrow the document requests if possible.

You should not talk to other potential witnesses as it can be seen as compromising your testimony, but it is not prohibited for your lawyer to speak with another witnesses lawyer, without compromising your testimony. 

In advance of the OTR, you may be required to provide documents related to certain transactions, individuals, businesses, etc. that you will likely be questioned on in your OTR. You also may be questioned on documents or testimony provided by others. You will also be required to fill out a background questionnaire. All these steps really need the caring hand of an experienced New York SEC regulatory attorney, so you can push back where the SEC is too invasive, and properly respond where required. 

Most importantly, Malecki Law has extensive experience preparing witnesses to testify. Testimony is not a simple conversation, there are certain testimonial “rules” you need to know. Thorough preparation is the most important thing to do before you testify and if done correctly, could possibly avoid future action by the regulator. Being fully prepared when responding to both subpoenas for documents and/or for testimony is of the utmost importance.

What you say, while typically just ordinary words, takes on a whole new meaning now that you are part of an investigation, and your words could potentially be used against you in civil or criminal proceedings. We carefully determine with allied criminal lawyers whether you should plead your Fifth Amendment rights against self-incrimination. You need to be careful of saying something that might expose you to legal liability, despite your words seemingly harmless nature. Words in a legal proceeding often take on enhanced meaning than in everyday life as you may use them.

It cannot be stated strongly enough that getting securities SEC regulatory lawyers in New York like Malecki Law is infinitely better than trying to “do it yourself.” Lawyers can speak to each other frankly (i.e., Malecki Law’s lawyers and the SEC lawyers) whereas the SEC staff cannot talk to you the same way, i.e., influence a witnesses testimony, give them legal advice or fear that a witness could twist their words. There are unwritten rules of testimony we prepare our clients to be prepared for, so they come off confident, polished, professional and credible.

Bluntly, the SEC is acting through a lawyer, so should you. Malecki Law’s experienced SEC regulatory law firm in New York has the experience to help you through this process, we have the credibility with the SEC, so as to get you the best possible resolution – or to make it go away completely if that is possible under the circumstances. Do not become an “easy mark,” unrepresented by counsel.

 Consulting with an experience attorney could be the best move that you make when faced with such a potentially life-changing event. The attorneys at Malecki Law have experience representing individuals in regulatory actions before FINRA as well as the SEC. Having an experienced counsel can greatly determine the outcome in your favor.

After you have answered your subpoena and appeared to testify, the SEC has different courses of action: (1) the SEC may decide not to take any further testimony or action against you; (2) the SEC will allow you to respond to (provide a “Wells Notice”) or settle what they feel is wrongful conduct; or (3) the SEC could bring formal charges. The possibility of civil or criminal legal action (usually via the U.S. Attorney) should be a primary concern of yours. The severity of penalties you could potentially be facing includes possibly losing your securities licenses if you are in the industry, spending a great deal of money on legal defenses and could cost you your job and your livelihood, as well as being encumbered with hefty fines. While you may hope no further actions are taken, you need to be prepared for the worst to obtain the best result.

Malecki Law SEC lawyers aggressively negotiate with the SEC on your behalf and have successfully convinced the SEC not to pursue their clients or obtained favorable results in settlements and hearings. We know the SEC’s required standards, weaknesses and limits to do this, both legally and factually as we leave no stone unturned in your case.

The magnitude of the potential penalties you may be facing can include substantial fines, as well as losing your license and your livelihood. So, from the moment you receive a subpoena, your focus needs to be on protecting yourself, your savings, your reputation, and any license(s) you have. SEC complaints and settlements are high-value web search items and can follow you around forever, so it is best to deal with them skillfully with experienced counsel from the earliest possible time.

For further reading, please check the following blog posts:

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Testimonials From Former Clients
★★★★★
I highly recommend Jenice and her team at Malecki Law. I had a challenging, and lengthly case. Jenice was professional, very knowledgeable, and a pleasure to work with. She managed to make the process far less stressful during a very difficult time. They care about their clients, and it definitely shows. Mario
★★★★★
Jenice is truly a miracle worker and one of the top securities lawyers. She handled a very difficult case for us, displaying her legal knowledge, intelligence, and savviness throughout the process. I cannot recommend her enough. The quality of work from her team rivals that of corporate law firms. She was always available, extremely professional, and made sure to know all the details of the case. We were very fortunate to have been referred to Jenice and highly recommend her for any securities related legal issues. Nathan A.
★★★★★
An excellent professional who represented us in trial regarding a bank fraud, an unexpected and difficult time. A professional that worked hard, persevering and who stood toe to toe against firms that had a team of excellent lawyers backing them up. Her unflinching determination really stands out, it makes you feel you have someone who really cares about trying to recover what you lost from the people that wronged you. Salomon Levi
★★★★★
It is difficult to thank you in words when gratitude comes from the heart, so I will try to link feelings with writing. It is essential for us to mention your excellence as a professional, your aptitude on legal fields, and your unavoidable persistence. All of these virtues that elevate the profession you exercise in such an admirable way, go hand in hand with your sense of ethics, your human warmth and the transparency in your actions. To sum up, thank you for being a listening ear and for having the right word while transmitting information about the legal process. Having you as our representative during such an adverse situation was a privilege and enough reason for our eternal gratitude. Angeles Aparain
★★★★★
To say that my securities litigation was complex would be a severe understatement. With multiple parties involved and spanning many years, trying to understand the issues was daunting to say the least. Jenice and her team broke down the transactions by segment and by party uncovering every hidden expense. In the end, I was more than happy and could not thank Jenice and her team enough. I would not hesitate to recommend Jenice to anyone. She is highly professional, incredibly knowledgeable, well connected to industry experts, has a tireless work ethic and is so pleasant and easy to communicate with. Five stars for sure! Andrew Loughrane