Drawing on prior literature highlighting banks’ timely access to borrowers’ private information, this study examines the real economic implications of undisclosed SEC investigations in private debt contracting. Findings indicate that relative to the pre–investigation period, banks charge higher loan spreads when borrowers are under SEC investigations. Additional tests indicate that firms pay extra spreads above industry peers with comparable risk profiles during investigations. Furthermore, the increased spread amplifies for bank–dependent borrowers, and borrowers with poorer credit quality and weaker information environment. These findings suggest that banks leverage SEC investigations to opportunistically extract rent while also perceive increased risk for borrowers under scrutiny. Supplementary analyses reveal tighter nonspread loan terms and increased likelihood and frequency of amending existing loan contracts when borrowers are under SEC scrutiny. Overall, this study underscores an economic cost of SEC investigations and informs regulators to consider such costs when deciding investigation cases.