Fort Lauderdale, FL SEC defense attorney David R. Chase talks about the critical mistakes you need to avoid in an SEC investigation. He shares that, throughout his many years of experience, he has seen individuals make mistakes after receiving an SEC subpoena that can be difficult or even impossible to undo and may permanently affect the outcome of the investigation. He cautions that one of the most serious mistakes is speaking with SEC attorneys without being represented by counsel, often under the mistaken belief that an innocent conversation will allow the individual to explain everything and cause the SEC to close the investigation. He emphasizes that every statement made to the SEC can potentially be used against the individual later, particularly because the person may not even know what the agency is investigating at that stage.

He also advises individuals not to discuss the investigation with anyone other than their attorney because conversations with friends, colleagues, or other trusted individuals are not protected by attorney-client privilege. He notes that even conversations with a lifelong best friend could potentially be discovered by the SEC and used as evidence. The same concern applies to putting information about the investigation in writing through emails or text messages, which may provide additional evidence for the SEC to obtain and potentially use against the individual.

He further warns that after receiving an SEC subpoena, individuals should never delete, alter, or destroy relevant documents. He explains that doing so may constitute obstruction of justice, which is a criminal offense, and could escalate what might otherwise be a manageable and defensible civil SEC matter into a potential criminal case.

He emphasizes that although receiving an SEC subpoena can naturally cause panic, the first step should be retaining experienced SEC defense counsel to protect the individual’s interests, reputation, livelihood, and financial assets. He describes SEC defense counsel as essential to navigating a complex process that is unfamiliar to most individuals and stresses the importance of having counsel involved from the beginning, before any self-inflicted mistakes are made that could permanently alter the course of the investigation. He particularly recommends working with a former SEC enforcement attorney who understands the agency’s investigative and enforcement practices and can advise, counsel, and protect the client throughout the process.

He also identifies another common mistake: selecting an attorney who may have experience in unrelated areas of law, such as real estate closings, DUI matters, general commercial litigation, or non-securities criminal cases, simply because the individual already knows that attorney. He emphasizes that the choice of counsel is critical because SEC investigations center on federal securities laws and require an attorney who understands those laws as well as how the SEC investigates, prosecutes, and resolves cases through settlement. He describes SEC defense as a highly specialized and niche practice and stresses that selecting experienced counsel can be critical to achieving a successful result rather than allowing an attorney with no prior SEC investigation experience to handle such a matter for the first time.