Subpoenas from the government can often be viewed as unwelcome intrusions into the business of a passive custodian and its accountholders. With a few fundamentals in place, though, custodians can use subpoenas as an opportunity to show themselves an ally to the regulatory community, to assist in protecting accountholders from fraud, and to test their own internal practices to identify areas that may create unnecessary risk or exposure.

Subpoena Intake

Which agency issued the subpoena?

The subpoena’s source can tell you a lot about what you’re dealing with. State agency? Federal agency? General securities commissioner, or a specialized agency with specific subject matter jurisdiction? Identifying the jurisdictional boundaries of which agency is requesting materials will tell you key information about what has happened to prompt the subpoena in the first place.

To what proceeding is the subpoena related?

Not all subpoenas are created equally. Sometimes they come from in-court litigation, sometimes they come from administrative proceedings, and sometimes they come from criminal investigations, to name just three different scenarios. The proceeding underlying the subpoena can give a custodian certain rights when responding, but it can also create certain deadlines for asserting objections.

When is my response deadline?

Don’t miss it. But also don’t be afraid to ask for more time if that will help you provide a complete response.     

Who will run point for responding?

Having a specific person or specific department handle responding to subpoenas will make life much easier for a custodian than having this task be handled on an ad hoc basis. Having that person be an attorney, whether in-house or external, can also trigger some attorney-client or work product protections that the custodian may want to have in place down the road. No matter who it is, get the subpoena to them without delay and empower them to respond.

Compiling the Response

What is being requested?

This seems basic, and often it is. Sometimes, though, this can also be the most complicated part of the subpoena. The custodian knows the records it maintains in the ordinary course of its business, while the government probably doesn’t, and that can sometimes lead to uncertainty and miscommunication about what is being requested. If there is an opportunity to create clarity by contacting the agency that issued the subpoena, seize it. Establishing a dialogue with the agency will help you know exactly what to search for, and it will also help the agency recognize that you are trying to be part of its solution. 

Why is that information being requested?

This is the first step of using a subpoena as a self-diagnostic tool. Review the request carefully. Does it call for information about certain accountholders, or investment sponsors, or financial advisors? Does it target specific types of assets? Each of these can be a clue as to what the agency is interested in, and can help the custodian identify whether there may be bigger issues at hand that require further internal investigation.

I’ve gathered the documents; now what?

Part Two of the self-diagnosis is to take the time to carefully review the documents that were deemed responsive to the subpoena before sending them to the agency. Note any patterns that emerge from the materials. Put them in chronological order and see if any peculiar trends or sequences appear. Custodians process thousands of disparate transactions each week, and it is easy for odd trends to get lost in the sea of transactions. But when an agency sends a subpoena, it often isolates a certain subset of accounts, or assets, or transactions in its request, and this can raise awareness of an issue for a custodian of which it otherwise may be unaware. 

This is key. Knowing what is going out the door before it does will help the custodian anticipate any potential follow-up requests from the agency, and it will help the custodian identify whether there are additional issues that it needs to address internally. Do certain assets, sponsors, or advisors need to be re-examined for administrative feasibility in light of what you learned from reviewing the subpoenaed records? Have any employees been handling accounts inconsistently with company policies? Are the company’s policies silent about how certain issues should be addressed, but those issues have popped up in the subpoenaed records? 

The bottom line:

Responding to a subpoena can be an excellent opportunity to identify potential gaps in a custodian’s recordkeeping practices, to identify potential issues for further training of employees, and to identify potential fraud (hopefully before it’s too late). Ideally, a custodian will want to run through these points before providing materials in response to a subpoena so that it is ahead of the game and can be proactive if there is more work to be done.

Producing the Materials

How should I produce the records?

Different agencies will have different standards by which materials should be produced. In general, they will be transmitted electronically, which will make it easier on the custodian to keep track of what is produced, and when.

Should I keep track of what is produced, and when?

Absolutely. As we saw with the situation, state and federal agencies frequently work together in their investigations. It will be much easier for a custodian to respond to serial subpoenas from different states or different agencies if it keeps a copy of what it produces each time. And that will also help avoid problems if multiple agencies cross-reference the responses they receive from the same custodian to ensure that each got a complete response. 


The suggestions above were originally included in a virtual presentation made by Todd Carroll and Kevin Hall at RITA’s Spring Conference 2021. Neither this document or the virtual presentation should be construed as giving legal advice or as creating an attorney-client relationship. If you have any questions about the above or issues that your company is facing, please reach out to  Todd Carroll and Kevin Hall directly.