## Facts

- Dresser Industries participated in an SEC voluntary disclosure initiative concerning questionable foreign payments and produced a report based on an internal investigation.
- The SEC sought underlying documents supporting Dresser’s disclosures; Dresser declined to produce some materials.
- The SEC opened a formal investigation into the use of corporate funds for questionable foreign payments and the adequacy of related securities-law disclosures and issued a subpoena duces tecum for documents.
- At the same time, the Department of Justice conducted a grand jury investigation into the same conduct and sought some overlapping materials.
- Dresser moved to quash the SEC subpoena, arguing it was being used to obtain criminal discovery for the DOJ and that parallel investigations caused unfair prejudice and warranted a stay.
- The district court enforced the subpoena and denied the motion to quash; Dresser appealed.

## Issues

1. Whether a target of an SEC investigative subpoena is entitled to a stay or other special protection due to a parallel DOJ grand jury investigation into the same conduct.
2. Whether the SEC’s subpoena constituted an abuse of civil process by functioning as criminal discovery for prosecutors.
3. Whether enforcing the subpoena improperly interfered with the grand jury’s role or violated due process or Fifth Amendment protections.

## Decision

- The D.C. Circuit (en banc) affirmed the order enforcing the SEC subpoena and denying the motion to quash.
- The court held that parallel civil and criminal investigations by different government entities are generally permissible.
- The court declined to impose a stay absent a showing of special circumstances creating considerable prejudice.
- The court found no basis to conclude the SEC acted solely as an arm of the prosecution rather than pursuing independent regulatory objectives.
- The court rejected generalized claims that subpoena enforcement would compromise grand jury independence or automatically create Fifth Amendment violations.

## Legal Principles

- Parallel civil and criminal investigations (simultaneous or successive) are ordinarily allowed when civil and criminal laws overlap.
- The Constitution does not ordinarily require staying a civil investigation or proceeding because a related criminal investigation is pending.
- A stay is discretionary and requires a particularized showing of special circumstances and substantial prejudice; courts assess requests case by case.
- Cooperation and information sharing between civil regulators and criminal prosecutors does not, by itself, establish abuse of process.
- Civil process becomes improper when used solely to obtain evidence for a criminal prosecution rather than to pursue the agency’s legitimate statutory aims; the party asserting abuse bears a substantial burden.
- Fifth Amendment concerns generally do not justify a blanket halt to a civil investigation and are addressed when specific compelled testimony or production creates concrete self-incrimination problems.

## Conclusion

The court enforced the SEC’s subpoena and refused to stay the SEC investigation despite a parallel grand jury probe, holding that overlapping civil and criminal enforcement may proceed absent a specific showing of special circumstances causing substantial prejudice or a demonstrated misuse of civil process solely for criminal discovery.


S.E.C. v. Dresser Indus., Inc., 628 F.2d 1368 (D.C. Cir. 1980) (en banc), cert. denied, 449 U.S. 993 (1980)