## Facts

- In the mid‑1970s, revelations surfaced that many U.S. corporations had made “questionable foreign payments” (bribes and similar payments) to foreign and domestic government officials to influence official action.   
- The SEC responded by bringing enforcement actions and creating a “Voluntary Disclosure Program” encouraging companies to stop such payments, investigate internally, and disclose past improper payments; in return, the SEC often exercised enforcement discretion but did not promise immunity from investigation.   
- Dresser Industries, Inc. participated in this program and made certain disclosures, but refused to give the SEC full access to underlying documents supporting its internal report.   
- The SEC then initiated a formal investigation into Dresser’s use of corporate funds for questionable foreign payments and the adequacy of Dresser’s public disclosures, and issued a subpoena duces tecum on April 21, 1978 seeking documents.   
- Files from the SEC’s voluntary disclosure program, including information related to Dresser, were shared with the Department of Justice, which opened its own criminal investigation and presented the matter to a federal grand jury; the grand jury issued its own subpoenas for Dresser documents.   
- Around the same time, the SEC subpoena overlapped substantially with the documents sought by the grand jury; Dresser refused to comply with the SEC subpoena, arguing that the SEC’s civil process was being used to obtain discovery for the criminal case and interfered with the grand jury’s role.   
- The SEC sought and obtained a district court order enforcing the subpoena and denying Dresser’s motion to quash; Dresser appealed, and the D.C. Circuit heard the case en banc.   

## Issues

1. Whether an SEC civil enforcement investigation and subpoena must be stayed, limited, or quashed because of a parallel criminal investigation by the Department of Justice and a federal grand jury into the same underlying conduct.   
2. Whether use of the SEC’s subpoena power in the presence of a parallel criminal investigation constitutes an abuse of civil discovery or an impermissible circumvention of criminal discovery rules and the grand jury’s function.   
3. Under what circumstances, if any, a court should exercise its discretion to stay or limit an administrative civil investigation to protect a target’s rights when simultaneous criminal proceedings are pending or contemplated.   

## Decision

- The D.C. Circuit (en banc) affirmed the district court’s order enforcing the SEC subpoena and denying Dresser’s motion to quash.   
- The court held that parallel investigations by different government agencies (here, the SEC and DOJ) generally may proceed simultaneously and need not be stayed or halted simply because of overlap between civil and criminal inquiries.   
- The court concluded that the SEC’s use of its subpoena power did not constitute an abuse of civil process, even if information obtained might incidentally aid a criminal investigation, so long as the SEC was pursuing a legitimate civil enforcement purpose.   
- The court emphasized that a stay of civil proceedings because of parallel criminal matters is not constitutionally required, but may be ordered in the court’s discretion upon a strong showing of “special circumstances” and substantial prejudice, which Dresser failed to demonstrate.   
- The court therefore required Dresser to comply with the SEC subpoena in full.   

## Legal Principles

- Parallel civil and criminal proceedings arising from the same facts are generally permissible; the government may pursue separate civil and criminal remedies simultaneously or in close sequence.   
- The existence of a criminal investigation (including a grand jury proceeding) does not automatically bar or stay an agency’s civil enforcement investigation or the use of its subpoena authority.   
- Courts have discretionary power to stay civil or administrative proceedings in light of parallel criminal proceedings, but such stays are the exception, not the rule, and require a showing of special circumstances and significant prejudice to the investigated party’s rights.   
- Use of civil investigative tools is improper only if civil process is being used in bad faith solely to gather evidence for criminal prosecution, without a bona fide civil or regulatory purpose; mere overlap of interests or sharing of information between agencies does not establish such abuse.   
- The grand jury’s investigative role is not infringed simply because another agency conducts a concurrent civil investigation or because information obtained in a civil investigation is later used in criminal proceedings.   

## Conclusion

Securities and Exchange Commission v. Dresser Industries, Inc. establishes that the SEC may enforce subpoenas and conduct civil investigations even when a parallel DOJ grand jury investigation is underway, absent a concrete showing of special prejudice or bad‑faith use of civil process. The case is a leading authority on the permissibility and management of parallel civil and criminal proceedings in securities and other regulatory contexts.


Securities and Exchange Commission v. Dresser Industries, Inc., 628 F.2d 1368 (D.C. Cir. 1980), cert. denied, 449 U.S. 993 (1980)