CFE Question of the Day: Subpoena response and privilege

Quiz Yazan Ibrahim
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CFE exam practice question — CFE Question of the Day: Subpoena response and privilege

CFE exam practice question: daily practice for the Certified Fraud Examiner (CFE) exam — domain: Law.

Question

An internal investigator at a mid‑sized company is served with a civil subpoena duces tecum seeking three years of billing records, internal memos, and emails that may include communications with company counsel about a suspected embezzlement. What is the best immediate course of action?

  • A. Produce all requested documents immediately to comply with the subpoena without delay.
  • B. Preserve all materials, notify company counsel, produce non‑privileged responsive documents, and assert privilege for privileged items with a privilege log and timely objections.
  • C. Refuse to comply and direct records staff to withhold documents until a court quashes the subpoena.
  • D. Delete or destroy documents considered irrelevant to avoid producing them and reduce the production burden.
Show the answer and explanation

Correct answer: B. Preserve all materials, notify company counsel, produce non‑privileged responsive documents, and assert privilege for privileged items with a privilege log and timely objections.

The best response is to preserve all materials, involve counsel, produce non‑privileged responsive documents, and assert privilege for privileged items with a privilege log and timely objections. This approach satisfies the duty to preserve evidence, avoids inadvertent waiver of privilege, and complies with procedural requirements for asserting privilege. Producing everything immediately risks waiving privilege and disclosing sensitive communications. Refusing to comply or withholding documents without court action risks contempt and sanctions. Deleting or destroying documents is obstruction of justice and likely criminal; it violates preservation obligations and could result in severe penalties and adverse inferences in litigation.

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