If you tell the truth you don’t have to remember anything. ~Mark Twain

It is a crime to lie under oath. Government regulators are acutely aware of the increase in lying, false statements, and obstructionist conduct by witnesses, subjects of investigations and attorneys who represent them.

In a recent speech, Robert Khuzami (copy here)— the SEC’s Director of Enforcement, outlined what he called an “epidemic in perjury” in American culture. He used this speech to warn defense counsel about improper and even unethical conduct in defending clients before the SEC. According to Mr. Khuzami, the level of obstruction has grown significantly in the last few years. He cited several instances of misconduct, such as when defense counsel gave foot signals to his client during SEC testimony to prompt the client to answer “I don’t know,” or defense counsel who instructed multiple witnesses to deny any recollection of obvious facts, even when confronted with documents to the contrary.

In addition, Mr. Khuzami highlighted unethical conduct involving representation of multiple witnesses when counsel has an actual conflict of interest. He warned that the SEC plans to get more involved in these situations by asserting conflicts which may prevent representation of multiple individuals, or in some cases, any individuals.

Mr. Khuzami noted that he was dissatisfied with methods used to conduct internal investigations and the manner in which privileged documents are reviewed, withheld or produced to the SEC.

Mr. Khuzami’s speech is a warning to witnesses and practitioners before the SEC. Someone will be made an example to prove his point and to drive the message home.

For practitioners before the SEC, there are numerous risks when they engage in such conduct. Most importantly, such conduct undermines counsel’s credibility with the staff. When issues are close, staff has significant power to tilt the result one way or another. With a lack of credibility, counsel is likely to lose close calls with the staff and counsel’s clients will suffer. Aggressive and unethical defense tactics can result in referrals to the Justice Department or ethics counsel in state bars, all to the detriment of counsel’s client.

A more successful strategy is to build credibility with the staff, respect their requests, represent your client in a professional manner, vigorously defending your client’s interests while avoiding unethical and improper conduct. As I always say, you catch more bees with honey than with fire. Professionalism and effective advocacy always trumps “blowhards” and deceivers.