E-Discovery in SEC and FINRA Investigations

Electronic discovery, and the risks of failing to properly retain and produce electronically stored information, is frequently discussed in the context of state and federal court litigation. It is also an increasingly prevalent issue in Securities and Exchange Commission and Financial Industry Regulatory Authority investigations.

The failure to know and comply with the requirements and expectations for e-discovery in these contexts can have a number of adverse consequences for both firms and their personnel, as well as potentially for their counsel. This article highlights some of the key requirements and considerations in identifying, collecting and producing ESI to the SEC or FINRA during an investigation.

SEC INVESTIGATION

The SEC's electronic production guidelines. The SEC Enforcement Manual, which was first made public in October 2008 and was most recently updated in August 2011 (the manual), includes several pages of information pertaining to the production of documents pursuant to subpoena, including a section specifically addressing the format for electronic production of documents to the SEC, including email and other ESI. The manual is designed to provide guidance to enforcement division staff in the investigation of potential violations of the federal securities laws. However, it also provides a helpful roadmap to individuals and entities who may be asked to respond to a voluntary request for information or served with a document subpoena as to what to expect with respect to the electronic production of documents, including the production of email and other ESI.

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Source: law.com
By: Rachel Tausend and Josh Dutill