The “Witness Assurance Letter” Challenge

In the June 15, 2009 webcast “A New Frontier: Best Practices in Fraud Investigations and Emerging Trends in SEC and DOJ Enforcement” panelist Jose Lopez, a partner with Schopf & Weiss LLP, noted that the SEC Enforcement Manual expressly holds out the possibility of something called a “Witness Assurance Letter.”  Indeed, Section 3.3.5.3.1of the Manual states:

In some very limited circumstances, the staff may provide a witness with a letter assuring him or her that the SEC does not intend to bring an enforcement action against him or her or an associated entity. In return, the witness agrees to provide testimony and documents and information. The provision of a written assurance letter must be specifically authorized by the Commission, and the circumstances under which to recommend the Commission provide such an assurance letter are narrow.

The Manual adds that some of the considerations in determining whether to recommend that the Commission provide a written assurance to a witness include:

  • Is the Commission unable to seek testimony from the witness in any other fashion?
  • Will the witness provide evidence crucial to an enforcement action against others? Is it impracticable to obtain the evidence from other sources?
  • Based on current knowledge, should the witness be the subject of a recommendation for an enforcement action?

Lopez and fellow panelist Pravin Rao, both of whom served in the SEC’s Enforcement Division and now represent defendants in SEC matters, noted that they had never seen a Witness Assurance Letter actually provided to a witness.

I promised to raise the issue with Securities Docket readers, which brings us to the “Witness Assurance Letter Challenge”:

Are you aware of a Witness Assurance Letter ever having been provided to a witness in an SEC matter?  If so, please shoot us an email (editor@securitiesdocket.com) with any details that we can share here.

2 Comments

  • Allan Horwich
    Posted June 19, 2009, 4:24 pm 4:24 pm 0Likes

    I have received such a letter for a witness, before the Manual came out I believe, but I am not at liberty to share the details, except to say that it was from the Chicago Regional office.

  • Mr. Anonymous
    Posted June 26, 2010, 8:32 am 8:32 am 0Likes

    Although I have not seen one, I’m under the impression that they are only given out when there are significant litigation risks and the Commission staff is looking to help reel in a bigger target.

Comments are closed.