by T. GormanPosted on Posted in Subpoena Enforcement

Following the announcement by Chairman Cox that the agency would withdraw subpoenas previously issued to journalists, the SEC announced that it would write a policy to determine when the issuance of such subpoenas is appropriate. This is a welcome clarification of policy by the SEC. At the same time one can only hope that the application of any such policy is more transparent than that of the previously announced standards governing credit for cooperation and for the determination of fines. See New York Times, at C3, March 3, 2006.

by T. GormanPosted on Posted in SECActions

There can be no doubt that there are more parallel proceedings being conducted by the SEC and the Department of Justice. The court’s decision in United Sates v. Stringer, CR 03-432-HA (D. Or. 1/9/06) highlights some of the difficulties, however. In Stringer, the U.S. Attorney’s office determined early in an SEC investigation that a criminal prosecution was warranted and elected to work with the SEC staff rather than conduct a separate grand jury investigation. The court found the government’s actions violated the defendants’ right to due process and the Fifth Amendment and were an egregious ploy by criminal prosecutors hiding behind a civil SEC investigation. See also United States v. Scrushy, CR-030-BE-0530-S (N.D. Ab. 4/15/05) (failure to tell witness that SEC testimony was being coordinated with the U.S. attorney’s office resulted in suppression).