SEC Form 1662: Understanding Your Rights and Obligations

If you received SEC Form 1662, you are not looking at routine paperwork. You are looking at something that will determine how the next months or years of your life unfold. At Spodek Law Group, we handle SEC investigations and enforcement matters because we understand what is actually at stake when that form arrives. This is not about filling out documents correctly. This is about protecting yourself from consequences that most people do not see coming until it is far too late.

Todd Spodek and our team have watched too many people make irreversible mistakes because they treated Form 1662 as a bureaucratic formality. It is not. The form you received is the government telling you, in writing, exactly what it intends to do with everything you say. Most people do not read it carefully. Most people do not understand what they are reading. By the time they do, they have already talked themselves into a situation they cannot talk themselves out of.

We are going to explain exactly what Form 1662 means, what rights it actually gives you, and what you need to do right now. Not because we want to scare you. Because you deserve to understand what you are walking into before you walk into it.

What Form 1662 Actually Says (And What It Means)

Form 1662 is a document the SEC provides to anyone asked to provide information as part of an investigation. Wheather you recieved a voluntary request or a formal subpoena, you get this form. The SEC says it tells you about your rights and how they will use the information you provide. Thats technicaly true. But what the form actualy does is document that you were warned.

Heres the part nobody reads carefuly enough.

The form states that disclosure of information to the Commission is mandatory if you recieved a subpoena, subject only to valid legal privileges. That word - mandatory. It means you dont get to decide what you want to share. The SEC decides what it wants, and you provide it. Refusal can result in a court order compelling compliance.

And heres were it gets real. The form includes a section called "Routine Uses of Information." This section explains that your testimony, your documents, everything you provide can be shared with other governmental entities. Were not talking about abstract possibilities. The form specificaly references state and federal law enforcement agencies. Criminal prosecutors. The FBI. The IRS. State securities regulators.

Read that last sentence again.

The SEC is telling you, before you say a single word, that what you say will be available to agencies that can put you in prison. This isnt hidden in fine print. Its right there on the form. Most people skim past it because the language sounds bureaucratic. But thats the government telling you what its going to do with your words.

The form also warns you about 18 U.S.C. Section 1001. This statute makes false statements to federal investigators a crime punishable by up to five years in prison. It doesn't matter whether you're under oath. It doesn't matter if you think you're just having a conversation. If you make a false statement, you can be prosecuted for it. The form tells you this. Then it asks you to start talking.

The Rights You Have (And the Trap Inside Them)

Form 1662 does inform you of certain rights. You have the right to counsel. You can have an attorney present during testimony. You can consult with your attorney before, during, and after the interview. These are real rights. There on the form.

But here's the thing about that, right?

In SEC testimony, your attorney can be present, but they cannot actually protect you the way you probably think. SEC testimony doesn't work like regular depositions. Your attorney sits there in an "advisory" capacity only. They can't object to questions. They can't stop questions. They can't instruct you not to answer. They can take notes, talk to you during breaks, and ask a few clarifying questions at the end.

Thats it.

You sit there for six hours - sometimes more - answering questions designed to extract admissions while your attorney watches, essentially helpless to intervene. Six hours. Think about that. Your attorney is there. But there watching, not defending. Less like having a lawyer and more like having a witness to your own testimony.

The form also tells you that you can decline to provide self-incriminating testimony. That's your Fifth Amendment right. Its real. Its constitutional. And exercising it can destroy your career.

Here's the trap. If you're a securities professional - a broker, an advisor, a fund manager - asserting the Fifth Amendment in an SEC investigation basically ends your ability to work in the industry. FINRA can bar you. Your employer will probably terminate you. Your career is over.

So you have the right not to incriminate yourself. But using that right comes with consequences that might be worse than the testimony itself.

Invoking the Fifth Amendment destroys your civil case. Probably ends your career in the industry. But prison is worse. Make the calculation with eyes open. Understand the tradeoffs. Don't let fear of career consequences lead you to testify your way into a criminal conviction.

The form gives you rights. The system makes those rights very expensive to use.

Routine Uses: Where Your Words Go After You Say Them

The "Routine Uses" section of Form 1662 reads like boilerplate legal language. Its not. It's the most important part of the form, and it's where most people stop paying attention.

The form states that the information you provide may be disclosed to appropriate agencies, entities, and persons. Lets be specific about who that includes:

• The Federal Bureau of Investigation
• The Department of Justice (federal prosecutors)
• The Internal Revenue Service
• State securities regulatory agencies
• State and local prosecutors
• Foreign regulatory authorities

And it doesn't stop there.

The SEC often makes its files available to United States Attorneys and state prosecutors. One practitioner called Form 1662 the "Open Sesame" for parallel investigations. Thats not metaphor. SEC staff members are regularly detailed to the Department of Justice to help build criminal cases. The same people asking you civil questions may already be helping prosecute you criminally.

These aren't hypothetical uses. This is what they do.

When you provide testimony to the SEC, you are not just answering questions for a civil regulatory agency. You are creating a record that can be handed directly to prosecutors who want to put you in prison. The DOJ Yates Memorandum - official government policy - encourages "early and regular communication between civil attorneys and criminal prosecutors handling corporate investigations."

The civil side shares with the criminal side. They don't hide this. They just dont emphasize it.

The SEC investigation process is designed to extract testimony under civil rules, where refusing to answer destroys your career, and then share that testimony with criminal prosecutors who couldn't get it otherwise. This isnt a flaw in the system. This is the system working exactley as designed.

The Parallel Investigation You Wont Be Told About

Here's what nobody tells you.

Twenty-seven percent of SEC investigations already have a parallel criminal investigation running.

Let that sit for a moment. More than one in four. Over a quarter of people sitting down for SEC testimony are already targets of criminal investigators. The DOJ doesn't launch criminal investigations because they might find something. They launch because they already know something is there.

You won't be told.

The SEC is not required to disclose whether a parallel criminal investigation exists. They can ask you questions, collect your documents, take your sworn testimony - all while federal prosecutors are watching, taking notes, and building there case. While you're cooperating with what you think is a civil matter, you're actually providing evidence for your own criminal prosecution.

By the time you see warning signs - FBI agents at your door, a grand jury subpoena arriving the same week as SEC document requests - the criminal case has been building for months. Maybe years. Everything youve said to the SEC, every document youve provided, every admission youve made thinking you were resolving a regulatory matter - all of it is now in the hands of prosecutors who want to send you to prison.

The form tells you this is possible. The "Routine Uses" section makes it clear. But it dosent tell you wheather it's already happening to you. You sit down thinking your dealing with a civil investigation. Your actualy providing discovery for your own criminal trial.

This is why Form 1662 matters so much. The form is not informing you of your rights. The form is documenting that you were warned before you talked yourself into a criminal prosecution.

The Fatigue Strategy and How It Breaks People

The staff who take your testimony have done this thousands of times. Your doing it for the first time. They know exactly what there doing. You dont.

SEC testimony typicaly starts with questions that seem procedural. Your background. Your role. Your responsibilities. Then they ask about your preparation - what documents you reviewed, who you talked to before coming in. These questions seem innocuous. They're not. They are designed to establish baselines and identify inconsistencies that become problems later.

Hours one through four are warmup. The questions feel managable. You start to relax. You think its going okay.

Hour five. Hour six. That's when they come for you.

SEC staff know that fatigue produces mistakes. They structure their questioning accordingly. Deposition witnesses make a disproportionate number of errors toward the end of the day. The hard questions - the ones that actually matter, the ones designed to extract the admissions they need - those get saved for when you're tired and your guard is down.

The imprecise answer given at 4pm because of exhaustion can become the basis for perjury charges or an expanded investigation. The statement you made becuase you were tired and just wanted to go home - that statement lives forever in the transcript. That statement can follow you into a criminal courtroom.

The SEC won 80% of its trials in 2024 and collected $8.2 billion in financial remedys. These are not amateurs fumbling through investigations. These are professionals who have perfected the art of extracting testimony that builds cases. They know how to ask questions that seem simple but contain legal traps. They know how to get people to volunteer information they didnt intend to share.

And they have six hours to do it while your attorney watches.

The Decision That Determines Everything

Look, heres the reality.

Most people who recieve Form 1662 never face criminal charges. The majority of SEC investigations stay civil. Cooperation can lead to favorable outcomes - reduced penaltys, settlement opportunitys, sometimes complete closure with no action. The 27% statistic means 73% of cases never go criminal.

And yes - invoking the Fifth Amendment or refusing to cooperate dosent guarantee you avoid prosecution. If DOJ already has what it needs, your non-cooperation just makes things worse without protecting you.

So what do you do?

First and most important: do not call the SEC directly. The letter accompanying your subpoena may invite you to call with questions. Dont. Anything you say to SEC staff can be used against you. People call, thinking they can explain why they didn't do anything wrong. Thats a mistake that can cost you everything.

Second: if your a securities professional, do not rely on your firms lawyers. Company counsel represents the company, not you. There interests may diverge from yours in ways that destroy you while protecting them. You need independent counsel who works for you alone.

Third: understand that getting counsel isn't paranoia. Its strategy. The reason to hire an attorney immediately isnt because your definately going to prison. Its because you need someone who can assess which category your in before you make irrevocable decisions. Someone who can determine wheather this is a routine regulatory matter or something that requires treating every statement as potentially criminal evidence.

The form tells you that you have the right to counsel. What it doesn't tell you is that exercising that right immediately - before you say anything, before you produce anything, before you make any decisions about cooperation - is probably the most important choice you will make.

Do not respond to any SEC communication without first consulting an attorney who specializes in SEC defense.

Do not provide any documents, testimony, or information until you understand the full scope of what you are facing.

Do not assume this is just civil because nobody told you otherwise.

How Spodek Law Group Approaches SEC Defense

This is what we do.

At Spodek Law Group, we handle SEC investigations with full awareness of the criminal implications that most attorneys overlook. We dont treat SEC matters as routine regulatory compliance issues. We treat them as potential criminal defense matters from day one, because thats what they might become.

Todd Spodek and our team understand the parallel investigation reality. We know that the civil answers you give today might be the criminal evidence used against you tomorrow. We prepare every client for that possibility, even when the case appears purely civil.

We will review your Form 1662 with you and explain exactly what each section means. We will assess wheather there are warning signs of parallel criminal proceedings. We will develop a strategy that protects your rights while understanding the practical consequences of exercising them.

We negotiate with the SEC enforcement staff. We prepare clients for testimony. We identify the legal traps before you walk into them. And if there is a parallel criminal investigation, we handle that too - because at Spodek Law Group, federal criminal defense is what we do.

Every case is different. The right strategy for you depends on the specific facts, the specific allegations, and the specific risks you face. But the first step is always the same: get representation before you make decisions that cannot be undone.

Call 212-300-5196. Right now.

The phone call is free. The consequences of not making it could be everything.

Form 1662 told you that you have the right to counsel. Now you know why that right matters more then anything else on the form. Use it. Call Spodek Law Group today.