Hey, SEC - Name a lawyer who's not "aggressive" when dealing with the Commission - and I'll show you a lawyer I'd never hire. That said, the SEC has become increasingly concerned with "alarming conduct" by counsel on many investigations. According to SEC Associate Enforcement Director Stephen Cohen, the SEC perceives as improper law firms who represent multiple witnesses, as well as lawyer interference during investigations.  As a result, the SEC is increasingly focusing on lawyers' behavior. Further Details from Stephen Cohen. With regard to multiple representations, the SEC has observed that a number of witnesses are coming up with the same version of events - and they're answering in the same manner to the same questions.

Yet, the Thomson Reuters reporter points out that Cohen isn't acknowledging the possibility that witnesses may actually all be telling the truth even if their version of events are similar.

Also troubling to the SEC is the active nature of defense counsel.  While such conduct is often framed as "helping" the staff, Cohen says this conduct doesn't help the SEC - e.g., counsel may try to remind a witness what he or she might not remember or caution a witness from speaking about certain things. Of course, none of this conduct is new, but Cohen says the SEC has seen it increase - perhaps because the SEC has not paid as much attention to it as it should.  And, it will do so going forward. SEC: Should Witnesses Be Represented? Thomson Reuters takes Cohen's comments to suggest that the SEC doesn't want a witness to have representation in the first place, or at least have a lawyer that does nothing.  However, the SEC frequently invites counsel to ask clarifying questions of their clients at the end of their testimony.  Which leads to the following questions - first two or lawyers to answer;  the third for the SEC to answer:

• Should lawyers interject to seek clarification at the time of the question and answer, or instead wait until the end of the testimony?
• Should a lawyer's attempt to zealously represent or protect a client, particularly when SEC questions goes beyond fact gathering and become prosecutorial?
• Why would the SEC not expect a witnesses' lawyer to take a more active approach when his or her client is being pressed by the SEC, which has taken a prosecutorial tact during an exam?

Conclusion. Lawyers should continue to zealously protect their clients and advance their causes - though, at the same time, be wary not to cross the line over to improper conduct that could be viewed as obstructive. Likewise, the SEC must understand that witnesses are entitled to legal representation and that the protection that's offered by their lawyers.  Therefore they must accept the role of lawyers who represent witness, so long as the lawyers don't engage in improper conduct.   [ThomsonReuters, 12/22/11]