Eroding Trust

Author

Bruce Carton
May 13, 2022

Good morning, it's Bruce. If you missed Securities Enforcement Forum West 2022 yesterday, you missed a lot! Highlights will be posted here and on Securities Docket next week. Until then, check out the clips and the full text of SEC Director of Enforcement Gurbir Grewal's speech below.

Clips ✂️

Remarks at Securities Enforcement Forum West 2022 – Gurbir S. Grewal

None of this is new. About a decade ago, one of my predecessors—Rob Khuzami—gave a speech about questionable behavior by defense counsel in SEC investigations. From slow-rolling document productions as I just described—to representing multiple witnesses with adverse interests in the same matter—to kicking witnesses during testimony to get them to answer questions a certain way, Director Khuzami catalogued many ways in which defense counsel undermined the SEC’s investigative process.

Unfortunately ten years on from that speech, we continue to see some of these behaviors, as well as newer forms of the same tactics. In other words, while defense counsel may have stopped kicking witnesses under the table, they’ve moved to more subtle behaviors.

by SEC Speeches and Statements

Securities Docket: Grewal also highlighted several practices by defense counsel that erode trust with the SEC, including:

  • repeatedly interrupting testimony to lodge hearsay or other inapplicable objections;

  • repeatedly speaking over the witness or attempting to answer questions;

  • overtly coaching the witness on how or whether to answer a question; and

  • needlessly prolonging a testimony session, preventing the staff from addressing all of the factual items at issue.

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