SEC Issues Policy For Issuing Subpoenas to the Media

The SEC outlined its policy for issuing subpoenas to the media in a release issued April 12, 2006. The policy applies only to the news gathering functions and news media sources, not demands for purely commercial or financial information unrelated to the news gathering function. The release outlines a multistep process for obtaining information from the media which focuses on only issuing such a subpoena after all other alternatives are exhausted and after notice to the media and negotiations over its content. Those steps require the staff to repeatedly notify the media and negotiate the contents of the potential subpoena in a fashion which is somewhat similar to that imposed on the SEC by the Ninth Circuit in Jerry T. O’Brien, Inc. v. SEC,704 F.2d 1065 (9th Cir. 1983) which was later reversed by the Supreme Court in SEC v. Jerry T. O’Brien, Inc., 467 U.S. 735 (1984) based in part on SEC arguments that such notice was contrary to the intent of Congress and would unduly interfere with its investigations.

The steps outlined in the release include the following: 1) The staff should try and obtain the information form alternative sources; 2) An Associate Director or Regional Director can authorize the staff to contact the organization through counsel if known to discuss obtaining the information; 3) If the information is essential to the investigation and the discussions fail, the Director of the Division of Enforcement, after consultation with the General Counsel, can authorize the issuance of a subpoena. The SEC Chairman and the recipient of the subpoena must receive notice. The subpoena should be negotiated with counsel for the news media to narrow it as much as possible. Absent special circumstances the subpoena should be limited to the verification of published information and the surrounding circumstances.

The SEC took the unusual step of issuing this policy following the issuance by the staff of subpoenas to certain media outlets and the announcement by Chairman Cox on March 3, 2006 that those subpoenas would be withdrawn. The SEC policy can be found at