Sun, Sand and Information Sharing: Considerations in Parallel SEC-DOJ Investigations

Holland & Knight continues its SECond Opinions Blog Summer Series featuring posts written and researched by the associates from our Securities Enforcement Defense Team. This blog comes from Austin Associate Hannah Maloney, who focuses her practice on complex civil litigation, False Claims Act, and white collar defense and investigations, representing clients in commercial, regulatory and healthcare sectors.

Companies or individuals facing an investigation by the SEC may simultaneously be confronted with parallel investigations from other agencies, including the U.S. Department of Justice (DOJ). Particularly when civil and criminal proceedings intersect, understanding how information is shared between investigating agencies is critical, as the consequences are wide-ranging. Though information can flow relatively freely between the SEC and DOJ, this framework is not without limits – particularly where DOJ grand jury material is involved. Given the SEC's renewed interest in working collaboratively with other agencies, as explained below, it is a good time to explore some of the mechanics of SEC-DOJ information sharing. We also identify when grand jury secrecy imposes limitations and highlight broader strategic considerations for SEC-DOJ parallel proceedings now that cross-agency collaboration is becoming increasingly common and prioritized.

Trending Upwards: SEC-DOJ Collaboration in Parallel Proceedings

Parallel investigations arise when non-governmental or governmental entities (including state, federal, criminal, or civil regulators and enforcement agencies) investigate the same or related conduct simultaneously. When the SEC is involved, its investigations are often accompanied by separate investigations from the Financial Industry Regulatory Authority, Commodity Futures Trading Commission, Financial Crimes Enforcement Network and, significantly, DOJ.

Courts have long endorsed the practice of conducting civil and criminal parallel investigations, and such investigations are also expressly permitted by federal securities laws.¹ Importantly, these investigations do not simply exist simultaneously; they often involve extensive cross-agency collaboration, whether from joint information gathering efforts, sharing information gathered in agencies' respective investigations, keeping each other apprised of the status of said investigations or other coordinated efforts. Though such cross-agency collaboration has existed for decades, it is becoming increasingly favored. Just months ago, in February 2026, the SEC overhauled its Enforcement Manual for the first time since 2017. The overhaul includes detailed cross-agency collaboration procedures and policies, including those addressing cross-agency information sharing, and explicitly encourages SEC staff to do so. Moreover, in his May 13, 2026, public remarks, the SEC's recently appointed Director of the Division of Enforcement David Woodcock explicitly indicated that coordinated, multiagency enforcement efforts – particularly alongside DOJ – would be among the priorities defining his tenure (as we previously discussed).

When it comes to interagency collaboration – information sharing in particular – during parallel proceedings, the SEC's dynamic with DOJ is perhaps the most consequential. Parallel SEC-DOJ proceedings can carry with them both significant civil regulatory exposure and potential criminal prosecution and other criminal penalties. As such, understanding how information flows from the SEC to DOJ and vice versa, the limitations of conducting parallel investigations and wider implications is essential for companies and individuals facing these proceedings.

As a caveat to the policy of collaboration, it should be kept in mind that both agencies are expected to maintain their independence. For example, the SEC's Enforcement Manual specifically provides that any SEC investigation must have a purpose independent from DOJ's, and the SEC cannot take action – including by gathering information – for DOJ's sole benefit. That being said, information sharing between the SEC and DOJ, specifically the flow from the SEC to DOJ, can be substantial.

2-Way Street: How SEC-DOJ Information Sharing Works

As a general rule, federal securities laws make it unlawful for the SEC to disclose nonpublic information it has gathered during its investigation without express authorization.² As such, the default presumption is that all information the SEC gathers during its investigation is confidential. The default presumption gives way to a well-established exception, however, which the SEC discloses in Forms 1661 and 1662. Forms 1661 and 1662 are respectively provided to entities or persons requested to supply information to the SEC and both state that the SEC "often makes its files available to other governmental agencies, particularly United States Attorneys and state prosecutors" and that "[t]here is a likelihood that information supplied by [the submitter] will be made available to such agencies where appropriate."

Federal securities laws and SEC policy also permit the SEC to grant DOJ and other requestors access to its nonpublic enforcement and regulatory files pursuant to an access request.³ The Director of Enforcement has been delegated authority by the SEC to grant such access requests, which must be in writing and signed by an official who is in a sufficiently senior or supervisory position to make and enforce the required representations. Once approved, with limited exceptions for SEC work product and privileged materials (although those, too, can be disclosed if specifically authorized), the SEC's investigative file, including testimony transcripts, subpoenaed documents and other materials collected during civil discovery, may be provided to DOJ or other requestor at any time, or over time, during an investigation. This is particularly consequential when DOJ is the requestor; as civil undertakings, SEC investigations and enforcement actions are generally afforded a much broader scope of discovery than DOJ's criminal cases. Thus, DOJ can obtain access to a wide range of information from the SEC that it might not otherwise have to build its criminal case, such as compelled testimony from a target.

In short, companies and individuals providing information to the SEC should do so assuming that most of that information, if requested, will likely be shared with DOJ – even though in practice the SEC may not disclose or confirm that a parallel criminal investigation exists.

Information also flows in the other direction. Subject to a notable exception for grand jury materials, as discussed below, the SEC may receive information from DOJ about the status of its criminal investigation and information voluntarily disclosed to DOJ. The SEC and DOJ may also conduct joint interviews or proffer sessions.

Turning Off the Spigot: Grand Jury Materials

The most significant limitation on information sharing across the SEC and DOJ involves DOJ grand jury materials. Grand jury materials broadly consist of any matter occurring before the grand jury or revealing what occurred before the grand jury. They include the substance of grand jury testimony, documents produced in response to grand jury subpoenas, other evidence used during the grand jury proceeding, internal government memoranda reflecting what transpired before the grand jury and witness interviews prepared for grand jury use, as well as other information revealing the identities of witnesses or jurors, strategy or direction of the investigation, and the deliberations, questions or votes of the grand jurors.

Under Federal Rule of Criminal Procedure 6(e), secrecy is required for these materials, and government prosecutors are expressly prohibited from disclosing them unless the rules provide otherwise. Section 5.2.2 of the Enforcement Manual confirms the application of this rule to the SEC, stating that "[t]he SEC is generally not privy to grand jury matters." The federal rules provide very limited exceptions to the rule against disclosure. A narrow but most likely pathway for SEC personnel to obtain grand jury material for use in its civil investigation or proceeding is through Rule 6(e)(3)(E)(i), which provides that a "court may authorize disclosure – at a time, in a manner, and subject to any other conditions that it directs – of a grand-jury matter … preliminary to or in connection with a judicial proceeding." However, such an order may be obtained only if the SEC demonstrates a "substantial" and "particularized need" for the materials. Even then, the court has broad discretion to determine whether to permit disclosure of the requested materials.

In some jurisdictions, a court order may not be required for materials that exist independently of the grand jury process, even if they discuss subjects that may have been before the grand jury. FBI Form 302, a memorialization of voluntary proffer sessions that does not reveal what was expressly presented to the grand jury, is one example.

What It All Means: Broader Strategic Considerations

Understanding how the SEC and DOJ share information is an essential first step when facing such proceedings and should be top of mind from the very first contact with regulators, as there can be wide-ranging consequences that will inform broader downstream strategy. A few considerations for our readers:

• Timing Considerations. Though the SEC and DOJ often carry out independent but parallel investigations regarding the same conduct and parties, the agencies are not always in sync regarding the timing, cadence, scope or likely outcomes of their work. These inconsistencies pose a significant risk of asynchronous requests for interviews or even sworn testimony before the SEC or grand jury and, consequently, the risk of developing different records among other serious concerns, including, as discussed below, self-incrimination risks.
• Seeking a Stay of SEC's Civil Enforcement Actions. Though DOJ can easily obtain SEC investigative materials, so, too, can civil defendants pursuant to broad civil discovery rules, which may indirectly give insight into parallel criminal investigations due to the flow of information between the SEC and DOJ. As such, once DOJ charges a case and the SEC initiates its own litigation following the conclusion of the agencies' parallel investigation, DOJ frequently seeks court approval to stay the SEC's civil enforcement proceedings pending resolution of the criminal prosecution. In these instances, the SEC often takes no formal position on whether its case should be stayed. But the defendant's decision to support or oppose a stay (or seek a stay itself) requires careful analysis. As just mentioned, proceeding with civil discovery gives respondents access to discovery that may inform strategy for both investigations. There may be good reasons to support a stay, though, as a stay would alleviate the self-incrimination concern discussed below and avoid the logistical obstacles of, and expending of significant resources required in, engaging with two agencies simultaneously.
• The Fifth Amendment. Individuals may invoke the Fifth Amendment right against self-incrimination if they are deposed in an SEC civil enforcement action, and doing so may make sense if a parallel criminal proceeding exists. However, unlike in criminal cases, invoking the Fifth Amendment gives rise to an adverse inference in the SEC's civil proceeding. That is, when an individual under investigation (or a defendant in litigation) asserts her or his Fifth Amendment rights, the SEC (or fact-finder) may presume that the withheld testimony would have been unfavorable or tended to incriminate the individual invoking the right and – in some circumstances – her or his company. The adverse inference possibility and risk of competing records and civil discovery that could disrupt both the prosecution and defendant's cases may support a stay of civil discovery while the criminal matter resolves or require careful sequencing when individuals are asked to provide substantive testimony. Such decisions should be made with experienced counsel.
• The Potential Cost of Cooperation. The SEC strongly encourages cooperation and offers tangible benefits for doing so, including reduced penalties, reduction or elimination of charges, no industry bar or even a complete declination. However, cooperation must be considered in the larger scale of the relevant conduct. In most instances, particularly where there is no indication that there is, was or may be a parallel criminal investigation or prosecution, the potential upside of cooperation is worth it (we wrote about the many potential benefits of cooperating with the SEC in 2022 and 2023). But it is also worth bearing in mind that materials submitted under the flag of cooperation (such as white papers, internal investigation reports and Wells Submissions) may be shared with DOJ and then used in criminal proceedings. For this reason, too, attempting to learn the existence of a parallel criminal proceeding – or if the SEC plans to make a referral to DOJ that could initiate a parallel proceeding – is often a priority. Unfortunately for parties who find themselves under SEC investigation, SEC staff typically will not confirm whether a parallel criminal investigation is ongoing and certainly will not when an investigation is being conducted on a covert basis. In addition to the foregoing, when parties are aware they are under investigation by both the SEC and DOJ, they should closely monitor whether the agencies are falling out of sync, the order of proceedings and scope of the investigations. Otherwise, they could face the risks identified above, such as competing records, among other things.

In sum, parallel investigations are a common feature of securities enforcement, and there is no end to cross-agency collaboration in sight. Understanding how information moves between agencies – and where it stops – is one of the most important things those facing parallel investigations can grasp early in the process. Experienced counsel who understand this framework can help navigate the investigation phase, help make informed decisions about cooperation and testimony, and help avoid the pitfalls that arise when civil and criminal proceedings intersect.

The SECond Opinions Blog will continue to monitor developments and provide updates. If you need additional information on this topic – for any topic related to securities enforcement or civil or criminal investigations or proceedings – please contact the authors or other members of Holland & Knight's Securities Enforcement Defense Team or White Collar Defense and Investigations Team.

Notes

¹ See 15 U.S.C. Section 77t; 15 U.S.C. Section 78u.

² 15 U.S.C. Section 78x(b).

³ 15 U.S.C. Section 78x(c); see also 17 C.F.R. Section 240.24c-1.