Definition
A subpoena is a legal document issued by a court to compel a person to do one of two things: testify in a case or provide evidence in a case. Commonly, subpoenas may be used to mandate the appearance of a party in court, or to demand the provision of specific documents or other physical evidence. In finance, subpoenas are often used in financial crime investigations, tax evasion cases, and other legal proceedings related to financial matters.
Key Takeaways
- A subpoena is a legal document or order issued by a court that requires its recipient to appear in court as a witness to give a testimony, or to present documents or other tangible evidence that is deemed necessary in a proceeding.
- Non-compliance with a subpoena can lead to serious consequences, including legal penalties such as fines or jail time. It compels an individual or a business entity to engage with the process of law.
- A subpoena can also be issued to a business, including financial institutions, to collect evidence pertaining to financial irregularities, fraud or other disputes. This can have significant impact on the financial operation of a business depending on the nature of the information required.
Importance
A subpoena is a vital legal tool used in both civil and criminal court cases, including financial investigations and litigations.
This official document issued by a government agency or a court compels individuals or businesses to produce documents or testify under oath, contributing significantly to financial proceedings.
In finance, subpoenas are important as they demand records in cases involving white-collar crimes, frauds, embezzlements, or financial disputes.
The documents produced as a result of a subpoena helps in revealing crucial information or evidence about the financial dealings, making it an essential mechanism for ensuring transparency, maintaining lawful conduct, and settling financial matters justly.
Explanation
A subpoena serves a critical role in the financial world, especially in legal proceedings and investigations related to financial matters. It is a formal document that commands an individual or organization to produce physical evidence or testify on a particular issue at a specific time.
Most commonly used in court cases and legal investigations, subpoenas enforce transparency and make important financial information available to the parties involved. Therefore, they help ensure that financial disputes, fraud allegations, and other associated matters are resolved logically and fairly.
It’s worth noting that subpoenas can be instrumental in complicated financial issues involving multiple parties, such as corporate lawsuits, bankruptcy cases, and government investigations into financial misconduct. For instance, in anti-fraud investigations, a federal agency may use a subpoena to obtain bank records, transaction documents, communications, and other critical evidence from the parties under investigation.
Similarly, in a shareholder lawsuit against a corporation, the plaintiff’s attorney may send a subpoena to acquire the corporation’s financial records, emails, etc. Thus, subpoenas provide a systematic avenue for gathering the necessary evidence in situations that require financial scrutiny or litigation.
Examples of Subpoena
Legal Investigations:In 2020, Deutsche Bank was subpoenaed by New York prosecutors over its relationship with the late financier Jeffrey Epstein. The subpoena requested records, documents, and any other communication about several types of suspicious transactions.
Tax Evasion Cases:For example, in 2016, U.S. courts issued a subpoena to several U.S. branches of the Swiss bank UBS, requesting information related to suspected tax evasion. The banks were required to turn over any data related to their U.S. customers to aid in the investigation.
Wall Street Investigations:In 2010, Goldman Sachs was requested to submit key documents to the Senate’s Permanent Subcommittee on Investigations due to allegations of misleading investors. The bank was delivered with a subpoena, which required them to hand over relevant documents associated with the finance practices that led to the 2008 economic crisis.
FAQs about Subpoena
What is a Subpoena?
A subpoena is a legal document issued by a court to compel a person to do either of two things; to testify about a particular matter or to present documents in a legal proceeding.
Are there different types of Subpoenas?
Yes, there are primarily two types of subpoenas. The subpoena ad testificandum compels you to testify whereas the subpoena duces tecum compels you to produce documents.
What happens if you ignore a Subpoena?
Ignoring a subpoena can result in penalties or fines, and in some cases, it may even lead to imprisonment. It is usually considered as contempt of court.
Can a Subpoena be dismissed?
Yes, a subpoena can be dismissed if it is not served properly, or if it requires the individual to partake in an activity that they cannot, for some reason. It can be challenged through a motion to quash or an objection.
How is a Subpoena delivered?
A subpoena can be delivered personally or through certified mail, depending on the jurisdiction. In some cases, it can be delivered digitally as well.
Related Entrepreneurship Terms
- Legal Notice
- Court Order
- Judicial Process
- Witness Testimony
- Contempt of Court
Sources for More Information
- Investopedia: Investopedia is a trusted reference source for understanding finance, investing, and economics.
- Nolo: Nolo is a renowned provider of legal advice for consumers and small businesses.
- The Legal Information Institute (LII) from Cornell Law School: It provides access to law, and legal information.
- Justia: They provide legal information, as well as an online directory of lawyers to consult with in specific areas.
