Can an individual assert the Fifth Amendment in an SEC civil investigation?+
Yes, but the SEC (in a civil proceeding) and a civil jury can draw an adverse inference from the assertion; the fact-finder can conclude the testimony would have been unfavorable. This is different from criminal proceedings, where Fifth Amendment assertions cannot be used against the defendant. The decision whether to assert the Fifth in a parallel proceeding requires careful analysis of both civil and criminal exposure.
The SEC entered a civil judgment against my client for securities fraud. Does a subsequent criminal prosecution for the same conduct violate double jeopardy?+
No. SEC civil enforcement actions are civil proceedings, not criminal. The Double Jeopardy Clause bars a second criminal prosecution after a first criminal prosecution for the same offense; it does not bar a criminal prosecution following a civil proceeding, even one involving the same conduct. The Supreme Court's decision in Hudson v. United States (1997) established that civil penalties do not trigger double jeopardy protections. An SEC civil judgment, including an injunction, disgorgement, and civil monetary penalty, does not preclude subsequent criminal prosecution by the DOJ for the same conduct. In fact, civil SEC settlements frequently include factual admissions that become evidence in subsequent criminal proceedings. This is a critical consideration when evaluating whether to settle an SEC civil matter before the DOJ has concluded its criminal investigation; any civil settlement must be structured with full awareness of what it may establish in a criminal case.
Should we seek a stay of the civil case while the criminal investigation is pending?+
Sometimes, and it cuts both ways. Courts have discretion to stay civil proceedings, or just discovery, while a parallel criminal matter runs, weighing the overlap between the cases, the stage of the criminal matter, and the prejudice to each side. A stay can protect a defendant from choosing between the Fifth Amendment and a civil defense, but it also freezes the chance to win the civil case early. The decision is strategic, not automatic, and should be made with both proceedings in view.
If we settle with the SEC, can the settlement be used against us in a criminal case?+
A standard SEC settlement is entered without admitting or denying the allegations, which prevents the settlement itself from operating as an admission. But everything produced to the SEC, including testimony, documents, and interview statements, remains available to criminal prosecutors, and the settled complaint's factual allegations can still shape how the DOJ views the case. Settling the civil matter without first mapping the criminal exposure is one of the most common and costly mistakes in parallel proceedings.
