Law firm DLA Piper has published the latest memorandum regarding the new SEC Enforcement Manual (previously discussed here). The memo observes that “the Manual provides a window into SEC enforcement operations and should be helpful in dealing with SEC enforcement counsel, particularly during the investigative phase of a matter.” DLA Piper examines several key provisions of the manual, and notes that
one important change from prior practice is found in the Manual’s section on contacts with senior SEC officials. Recently, the SEC has been heavily criticized for its handling of high-profile matters in which there was at least an appearance that senior officials interceded to override recommendations of frontline SEC enforcement attorneys who were closer to the evidence…. Perhaps as a result, the Manual makes clear that “although outside persons involved in investigations [should] feel that they may contact the staff in the Division without hesitation, including senior officials,” such contacts are to be circumscribed according to certain “best practices.” Principal among these is the recommendation that senior staff should include line investigative team members in material external communications, including in preparing for and memorializing the external contact….
The memo also highlights that the Manual advises enforcement staff to conduct their investigations in accordance with Model Rule of Professional Conduct 4.2, which provides that a lawyer is prohibited from contacting a person the lawyer knows to be represented by another lawyer:
In the corporate employment context, this means that, in the absence of a compelling reason to contact an individual directly, staff should go through corporate counsel to communicate with corporate employees with managerial responsibilities (e.g., senior officers); employees who supervise, direct or regularly consult with corporate counsel concerning the subject matter of the investigation; or employees whose acts or omissions may be imputed to the corporation for purposes of establishing civil or criminal liability.
DLA Piper also notes that “the Manual brings the SEC in line with the new DOJ policy, as it provides that the staff is directed not to ask a party to waive its privilege, and waiver of a privilege is not a prerequisite to obtaining cooperation credit.”