What to Expect During an SEC On-the-Record Interview

The day you've been dreading has arrived. The subpoena date on your calendar is tomorrow. You've filled out the Background Questionnaire disclosing your personal information, your securities accounts, your employment history going back years. Your attorney has briefed you. You've reviewed the documents. But nothing quite prepares you for walking into that room and sitting across from SEC Enforcement staff while a court reporter types every word you say for the next six, seven, sometimes eight hours.

This is not a conversation.

The SEC On-the-Record interview is a carefully designed psychological extraction session. The six-hour duration isn't bureaucratic inefficiency - it's methodology. According to practitioners who've handled hundreds of these cases, "deposition witnesses make a disproportionate number of errors toward the end of the deposition and toward the end of the day. SEC staff know this. They often save their most difficult questions for hour five or six, when you're tired." The imprecise answer you give at 4pm because you're exhausted can become the basis for perjury charges or expanded investigation.

Welcome to Spodek Law Group. This article explains what actually happens during an SEC OTR interview - not the theory, but the lived experience moment by moment. We're going to walk you through the room, the people, the mechanics, and the psychological architecture that makes this process so effective at extracting testimony the government can use against you.

The Room You're About to Walk Into

The conference room looks normal. Standard corporate furniture. Maybe some water bottles on the table. The SEC staff attorneys dress in business casual. They might make small talk before starting. The whole enviroment is designed to feel like a meeting, not an interrogation.

That's precisely the trap.

In a police interrogation room, you'd be on guard. The harsh lighting, the metal table, the obvious recording equipment - all of it screams "be careful." The SEC interview room sends the opposite signal. It feels safe. Professional. Collegial, almost. Which is why people talk too much. Which is why they volunteer information they didn't intend to share. Which is precisely the design.

When the interview begins, a court reporter will be present to create a verbatim transcript. One Enforcement attorney usualy conducts the questioning, but several can attend. Before you arrived, you recieved a Background Questionnaire requiring disclosure of personal information (name, spouse, children), phone numbers and residences from the past three years, social network profiles, securities accounts, bank accounts, and your employment history. The SEC already knows alot about you before you sit down.

Your Attorney's Hands Are Tied

Here's something that catches people off guard: your attorney can be present during the entire interview.

That sounds protective. Don't be reassured.

According to SEC Form 1662, your attorney sits beside you in an "advisory capacity." There specific about what that means:

What your attorney CAN do:

• Advise you before, during, and after testimony
• Question you briefly at the conclusion to clarify answers
• Make summary notes for your use
• Counsel you on privilege assertions

What your attorney CANNOT do:

• Object to questions the way they would in court
• Make speaking objections
• Instruct you not to answer (except on privelege grounds)
• Interrupt the flow of questioning
• Challenge relevence or foundation

The difference from a normal deposition is stark. In a regular civil deposition, your attorney can say "objection, that question is improper" and in many cases instruct you not to answer. They can fight about scope. They can protect you from unfair questioning. In SEC testimony, none of that works. There's no judge present to rule on objections. The SEC staff controls the record completely - they decide when to go on the record and when to go off.

Your lawyer watches while you potentialy incriminate yourself.

The Six-Hour Marathon Isn't Accidental

Let's talk about duration. The average SEC On-the-Record interview runs six hours or more of sustained questioning. Some extend across multiple days. Theres no legal limit on how long they can keep you in that room.

This length isn't inefficiency.

The SEC staff conducting these interviews have done this thousands of times. Your doing it for the first time. They know every trick. They know how to ask questions that seem simple but contain legal traps. They know how to get people to volunteer information they didn't intend to share. They know that fatigue produces mistakes.

What Form 1662 Actually Tells You

Before testimony begins, you receive SEC Form 1662. Most people glance at it and move on. That's a mistake.

Form 1662 explicitly tells you:

1. Your testimony "may be used against you in any federal, state, local or foreign administrative, civil or criminal proceeding"
2. The penalty for false statements under 18 U.S.C. § 1001 is up to five years imprisonment
3. Information you provide may be shared with other agencies - including criminal prosecutors at DOJ
4. Your counsel's role is strictly "advisory"
5. For voluntary testimony: "you need not answer any question and may leave whenever you wish"

The government tells you exactly what they can do with your words. Most people don't absorb what that actualy means until its too late. That warning about information being shared with other agencies? That's the SEC telling you - in writing, before you say anything - that federal prosecutors may be listening.

The Criminal Pipeline You Can't See

Here's the part that keeps securities lawyers up at night.

SEC investigations frequently run paralel with Department of Justice criminal investigations. The SEC shares information freely with federal prosecutors. When you give testimony to the SEC, your not just talking to civil regulators - you're potentialy providing evidence to people who can charge you with federal crimes.

One practitioner article puts it bluntly: "If there's a parallel DOJ investigation — and you may not know if there is — your testimony can be accessed by federal prosecutors."

The SEC is not required to tell you wether DOJ is already investigating. You might answer questions for hours, thinking your cooperating with a civil inquiry, while criminal prosecutors are already reviewing your trading records. Your interview transcript goes directly into their file. Every word you say under oath becomes potential ammunition for a criminal case you didnt know existed.

The Fifth Amendment Trap

You have the right to refuse testimony on Fifth Amendment grounds. Form 1662 tells you this. The SEC must inform you of this right.

But invoking the Fifth in SEC proceedings isn't like invoking it in criminal court.

In criminal proceedings, a jury cannot draw adverse inferences from your silence. The SEC can. Under Baxter v. Palmigiano (1976), "the Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them." In SEC civil proceedings, your refusal to answer can support a finding that you acted with the requisite scienter - the mental state required for fraud liability.

And if your a registered representative under FINRA, the situation gets worse.

Much worse.

According to practitioners: "If you invoke the Fifth Amendment in response to a FINRA request for information or testimony, FINRA will bar you from the industry. Automatically. No hearing. No appeal. Your career in securities is over."

A 2025 lawsuit has challenged this as unconstitutional, arguing that FINRA - though not a government agency - effectively controls careers and raises questions about procedural fairness. But until that challenge succeeds (if it does), the current rule stands: invoke the Fifth in a FINRA matter and your finished.

When One Answer Destroys Everything

The consequences of testimony mistakes cascade in predictable ways:

Step 1: You give a misleading or inaccurate answer - maybe intentionaly, maybe through confusion or fatigue

Making Real-Time Decisions Under Pressure

During the interview, you'll face real-time decisions that require instant judgment while exhausted and under oath. Here's a framework:

When to pause: If a question is complex, ambigious, or touches on uncertain facts, take a moment. "Let me think about that" is a legitimate response. Better to pause then to guess. The court reporter will note a pause, but that's infinitely better than an imprecise answer that contradicts documents.

When to clarify: If you dont understand a question, say so. "Can you rephrase that?" or "Are you asking about [specific thing]?" forces precision. You're not obligated to interpret vague questions. Don't answer what you think they meant - answer what they actually asked.

When to assert privilege: If a question touches on privileged communications with counsel, your attorney can advise. But remember - you can only assert privilege on proper grounds. You cannot simply refuse to answer inconvenient questions.

When to request a break: You can ask for breaks to consult with counsel. If you feel yourself losing focus or getting confused, a five-minute break is better than a confused answer that follows you forever.

Todd Spodek has guided clients through both scenarios - interviews that revealed the investigation was narrower then feared, and interviews that made clear immediate criminal defense intervention was necessary. The process itself reveals which category your in.

When Your Ready

If you're facing an SEC On-the-Record interview - wether scheduled for next week or still being negotiated - Spodek Law Group can help you understand what you're walking into. We've handled securities matters in the Southern District of New York, coordinated with the Enforcement Division, and prepared clients for testimony that could have gone badly but didn't.

The consultation is free. Theirs no obligation.

What you'll get is an honest assessment. How serious is this? What does Form 1662 tell you about scope? Is there likely parallel criminal exposure? What are the realistic outcomes, and how does preparation affect them?

Call us at 888-908-3274. Or don't. But don't walk into that room thinking its just a conversation with some regulators. It isn't. It's a carefully designed evidence-gathering session where fatigue is weaponized, your own attorney is deliberately neutered, and your words become the case against you.

Get prepared. Understand the terrain.

Were here when you need us.