Facing an SEC Subpoena? Here’s What You Need to Know and How an Attorney Can Help

Dmitriy Smirnov

February 3, 2025

Securities Law

If you’ve been served with an SEC subpoena, it’s likely you are facing a stressful and uncertain situation. A subpoena is an official request from the Securities and Exchange Commission (SEC) to produce documents, provide testimony, or both, as part of an investigation into potential violations of securities laws. While receiving a subpoena does not necessarily mean you are under investigation, it should be taken seriously. The SEC issues subpoenas to gather information related to concerns such as fraud, insider trading, or non-compliance with regulations.

When served with a subpoena, it’s critical to understand that you are not immediately considered guilty, but the SEC’s interest in your activities indicates that they are closely examining your actions. Handling the situation properly, with the guidance of an experienced SEC attorney, is essential to protect your legal rights and avoid unnecessary complications. A seasoned attorney will help you navigate the complexities of the process and ensure that you take the right steps to minimize the potential risks associated with the subpoena.

Why the SEC Issues Subpoenas

The SEC has the authority to issue subpoenas when it suspects violations of securities laws. This could include issues like insider trading, fraudulent financial reporting, or market manipulation. A subpoena can also be issued to compel individuals or companies to produce records or provide testimony related to these matters. The SEC often issues subpoenas when they are investigating potential violations, and their goal is to obtain the necessary information to determine whether a violation has occurred.

Although the issuance of a subpoena is not an accusation of wrongdoing, it can be a sign that the SEC is scrutinizing your activities. Responding appropriately to the subpoena is crucial to avoid escalating the situation. The right attorney will help ensure that you don’t inadvertently make mistakes during the process that could worsen your position.

Your Legal Rights in Responding to an SEC Subpoena

Facing an SEC subpoena doesn’t mean you have to comply with every request without question. As a recipient of a subpoena, you have legal rights, including the right to challenge overly broad or unduly burdensome requests. The SEC’s powers are not unlimited, and a skilled attorney will help you assert your rights where necessary.

For instance, you have the right to object to providing documents or testimony that are protected by legal privileges, such as attorney-client privilege or work-product doctrine. Your attorney will guide you in identifying what information should and should not be disclosed, ensuring you avoid making disclosures that could jeopardize your defense or personal interests. Navigating the complexities of what to disclose can be difficult, and having the right attorney ensures that you are fully protected.

The Role of a SEC Attorney in Responding to a Subpoena

An experienced SEC attorney will play a crucial role in helping you navigate the subpoena process. They will begin by carefully reviewing the details of the subpoena to determine the scope of the request and assess whether it is overly broad or unreasonable. In some cases, your attorney can negotiate with the SEC to narrow the subpoena’s scope, minimizing the burden on you and your business.

Your attorney will also ensure that you respond in a timely manner, which is critical. Missing deadlines or failing to comply with the SEC’s requirements could lead to additional legal consequences, including charges of obstruction or contempt. A knowledgeable attorney will help you meet all deadlines and avoid these risks. Moreover, if the SEC’s request is vague or unclear, your attorney can seek clarification to ensure that you are only providing the necessary information.

United States v. McDermott and the Protection of Legal Rights

In United States v. McDermott, 245 F.3d 133 (2d Cir. 2001), the court addressed the government’s right to issue subpoenas during securities investigations. The ruling clarified that while the SEC has the authority to demand documents and testimony, it must also respect individuals’ legal rights in the process. In this case, the court emphasized that individuals must be protected from unjust or overreaching demands, reinforcing the importance of having an attorney who understands how to navigate these legal protections.

This case highlights the balance that must be struck between the SEC’s investigatory powers and the rights of those under investigation. Having an experienced SEC attorney ensures that you are not only complying with legal requirements but also safeguarding your rights throughout the process.

Why You Need Legal Representation

When faced with an SEC subpoena, it’s critical to have legal representation to protect your rights and interests. A skilled SEC attorney can help you understand the subpoena, negotiate with the SEC, and ensure that you are not disclosing privileged or irrelevant information. With the proper legal guidance, you can respond to the subpoena appropriately, minimizing the risk of self-incrimination or unnecessary disclosure.

At Fridman Fels & Soto, we are dedicated to providing expert legal representation to individuals and businesses facing SEC investigations. Our founding partners draw on decades of federal government experience, including with the SEC, to help clients achieve favorable outcomes when the government comes knocking. Contact us today to schedule a consultation and ensure your rights are fully protected.

SEC Subpoena FAQs

What happens when I receive an SEC subpoena?

Receiving an SEC subpoena means you are being asked to provide documents or testimony for an investigation. It’s essential to work with an attorney to understand what’s required and protect your interests.

Do I need an attorney if I receive an SEC subpoena?

Yes, an attorney specializing in SEC matters can help you understand the subpoena, protect your rights, and ensure compliance without disclosing unnecessary information.

Can an SEC subpoena be contested?

In some cases, a subpoena can be contested if it is overly broad or violates your legal rights. Your attorney can help you file a motion to quash or modify the subpoena.

How long do I have to respond to an SEC subpoena?

The response time will be stated in the subpoena itself. It’s important to respond within the required time frame to avoid penalties. An experienced attorney will be able to work with the SEC to obtain additional time to respond under the right circumstances. 

What are the consequences of ignoring an SEC subpoena?

Ignoring a subpoena can result in fines, contempt charges, and further legal complications. Always consult with an attorney to ensure a proper response.

Contact us for SEC Subpoena Defense

If you receive a Wells notice, an SEC subpoena for documents or testimony, a FINRA 8210 request, a FINRA on-the-record (OTR) interview request, or a similar inquiry from a state regulator, such as Florida’s Office of Financial Regulation (OFR), it is essential to act immediately. Contact Fridman Fels & Soto, PLLC to speak with an experienced SEC defense attorney. Prompt action is critical to protect your rights and ensuring an effective response.

Alejandro Soto is a former senior official with the SEC. He leads Fridman Fels & Soto, PLLC’s Securities Litigation and SEC Defense Practice Group and is admitted in Miami, FL and Washington, DC.