DIRECTORS and company executives have been warned to seek legal advice before agreeing to speak to officials from the Securities and Exchange Commission (SEC), the US investment watchdog.

The warning, issued by the Institute of Chartered Accountants in Ireland and the Institute of Directors, comes hours after three British bankers, the NatWest Three, were granted bail by a court in Houston, Texas, where they face up to 20 years in prison for charges related to the collapse of Enron.

Up to 20 Irish executives working for companies headquartered in America or those dealing with US firms have sought legal advice in the past year following requests from the SEC, which has confirmed that it is travelling to Ireland to investigate a wide range of revenue recognition issues.

“Do not agree to meet with the SEC until you have received full legal advice in advance,” said Robert Grier, president of the Institute of Directors. “If you are working in a company, especially an American subsidiary, you have to be very careful. The plight of the NatWest executives is being noted here in Ireland. Corporate governance in Ireland is pretty good, but companies have to be careful that trickles don’t turn into big flows that can lead back to an Enron-style investigation.”

Several partners in Irish corporate law firms have told The Sunday Times that officials from the SEC have travelled to Ireland in recent months to interview Irish executives.

Often unannounced, the officials arrive seeking interviews and requesting depositions from Irish directors, officers and executives. Many SEC investigations — which are civil in nature — morph into full criminal investigations led by the FBI and president George W Bush’s corporate fraud task force, resulting in extradition warrants.

“In light of the NatWest Three, there is a very real concern on the part of company directors and senior executives in Ireland,” said Aidan Lambe, deputy director of the ICAI, who said there was an increasing sense of vulnerability among Irish directors. “People should not approach these positions lightly. Because of the whole gamut of national and international legislation, company law has become so complex.

“When you are approached to take on a senior role, take legal advice in relation to your national and extra-territorial obligations, and seek full legal advice if you are asked to assist in an SEC investigation.”

In November, Jerry Shanahan, the first Irish executive to be tried by a US court since the collapse of Enron, will go on trial.

Shanahan, 41, former chief operations officer for Enterasys Networks, an American software company, stands accused of fixing share prices as part of a conspiracy to defraud investors of almost $1.3 billion (€1.1 billion).

Last March, on what was meant to be the opening day of the trial, a judge suspended proceedings following allegations of professional misconduct against the federal attorney seeking to imprison Shanahan.

The NatWest trio are accused of conspiring with executives at Enron to fiddle NatWest out of millions through a transaction in the Cayman Islands.

The deal culminated in the three making a personal profit of $7.3m. They insist their gain was legitimate and the deal was approved by their employer.