Compliance in Focus: Defending Remote Witness Interviews in White Collar and SEC Investigations – Lessons Learned and Emerging Best Practices

Print PDF
May 28, 2020

The new focus on remote witness interviews and testimony – a focus many believe will outlive the COVID-19 virus – presents novel issues and implicates the way government and white collar defense lawyers investigate facts, interact with each other and handle documents. It also requires defense lawyers to reconceive the manner in which they prepare, communicate with and present their clients.

In a public statement issued on March 23, 2020, the Co-Directors of the Security and Exchange Commission’s Division of Enforcement declared that the SEC “is committing substantial resources to ensuring that our Main Street investors are not victims of fraud or illegal practices in these unprecedented market and economic conditions.” More recently, they held a town hall meeting in which they urged their staff lawyers to continue their work despite the burdens imposed by the COVID-19 crisis. And only a few days ago, Co-Director Steve Peiken noted that he had directed the SEC staff to work with defense counsel to reach reasonable accommodations with respect to remote testimony.

However, senior officials at the SEC have not announced procedures for how staff and defense lawyers should conduct arguably the most critical part of the Division’s work – witness interviews and testimony. Neither has the Department of Justice given public guidance on how interviews by prosecutors will proceed. Internal investigation interviews, less likely to be delayed by the lockdown, have proceeded with lawyers on both sides making good faith decisions about how interviews will be conducted. 

This situation leaves open a variety of issues and opportunities for those defending witnesses before the Commission, the DOJ, and during internal investigations. These issues may become particularly acute if, as some have predicted, the COVID-19 crisis leads to a spate of new SEC, DOJ, and internal investigations, including, for example, investigations into the recent spike in corporate insider stock sales, fraud in the application for CARES Act loans and corporate accounting and disclosures.

Defense counsel need to consider a range of issues before agreeing to proceed with a remote interview, including counsel’s ability to fully assess and prepare the client, the client’s potential exposure and the consequences of delay or refusal to proceed with the interview. But assuming the client and defense counsel agree to go forward, the remote interview option leaves open a variety of challenges and opportunities for those defending witnesses before the SEC, the DOJ and during internal investigations. In particular, counsel should consider the following issues in preparing for remote witness interviews:

  • The logistics of sharing documents and exhibits with witnesses, including ensuring that the witness has an opportunity to carefully review documents he/she will be questioned about and has access to those documents during the interview.
  • How should counsel advise the client during testimony without raising concerns of coaching?
  • Challenges in developing a rapport with the government and generally “reading the room” over video/telephone and practices that may help mitigate those challenges.

We explore these issues in depth in a broader article published by Law360, which can be found here.