Jay-Z thrusts SEC subpoena enforcement into the spotlight: A look at recent trends and considerations

The staff of the Securities and Exchange Commission’s (SEC) Division of Enforcement use subpoena enforcement actions to obtain the information they deem necessary to an investigation when the recipient of an investigative subpoena fails to respond. The SEC announces such actions in order to deter others who might consider non-compliance as well as to show the public that the SEC is vigilant about asserting its authority. But the SEC does not always enforce subpoenas in instances of non-compliance and when it does, it does not always announce subpoena enforcement actions; indeed, in the past it rarely did. A good example of these actions is in the SEC’s public announcement in 2018 of a subpoena enforcement action against the rapper Jay-Z, which appears to have obtained the desired effect of compliance with the subpoena, as well as, given the fame of the subject, giving broad coverage of the SEC’s willingness to enforce its subpoenas. This paper explores recent trends in the issuance and enforcement of SEC subpoenas, including the increase in enforcement action publicity, and discusses considerations when choosing between complying with a subpoena or, alternatively, risking a subpoena enforcement action.