SEC Investigations - Mitratech

SEC Investigations

I realize that the type of work our corporate counsel clients typically deal with is complicated and can have far reaching implications throughout the organization. When the SEC gets involved, I’m sure there is special interest paid from the highest level of the corporation, meaning that it’s all hands on deck for the GC and her team. What I did not realize is the sheer amount of corporations who will face an SEC investigation in the near future.

According to this recent article from ALM’s Corporate Counsel, the Securities and Exchange Commission was very active in 2012, filing 734 actions. Perhaps more tellingly, the SEC is seeking an 18.5 percent increase in its 2013 budget. As Mr. Marder notes, this means that most large corporations will face some action from the SEC this year or just recently experienced an investigation. We can also infer that this trend will continue over the coming years as the public has latched on to stories of corporate wrong doing throughout the last decade resulting in the increases in regulation we have lately seen.

Mr. Marder provides some expert advice for those corporate counsel who may be squarely in the SEC’s path. In reading his article, it strikes me that preparing for and managing this type of inquiry would require careful collaboration across the entire corporate legal team. It would be highly desirable to have strong policies and business practices in place to manage the matter from start to finish, from responding to the initial inquiry, handling any internal investigations, tracking policies, retaining and producing documents and potentially working with outside counsel. Hopefully, by having these items in place with the assistance of technology tools, counsel can remain proactive and compliant, thereby reducing the risk of facing a dreaded subpoena.

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