It’s a general principle of federal securities enforcement that possesses material nonpublic information alone does not establish insider-trading liability. The possession and the use of such information are two separate elements.Federal insider-trading liability is…
Civil and criminal insider trading liability both generally require: (i) material nonpublic information, (ii) a breached duty, and, (iii) culpable knowledge. Although the SEC has broad authority to pursue civil enforcement for insider trading,…
To prove insider trading under federal law, the government must typically prove that the information used to make a trade was both (i) material and (ii) nonpublic. Materiality of information is an important factor…
Advance payments on defense expenses are the most immediate form of protection. While advancement and indemnification together address an individual’s defense expenses in SEC proceedings, this is typically limited to “covered” expenses. Because corporate…
SEC staff conduct inquiries and formal investigations based on several types of suspected violations. In digital-asset cases, these include, among others: Offering digital tokens as securities without registering the offering (or meeting an applicable…
An SEC subpoena is a legal demand for records, sworn testimony, or both. Receiving an SEC subpoena does not establish wrongdoing under the federal securities laws, although it is a matter that demands immediate…
What is a Wells notice? The SEC staff uses Wells notices as a communication device. When the staff contemplates recommending enforcement action in a matter, including an enforcement action involving a federal court or…
Unlike civil or criminal litigation, there is no initial “motion to dismiss” that can automatically terminate an SEC investigation prior to the issuance of enforcement charges. While SEC staff may close investigations independently, or…
If you are wondering whether the Wells notice is an actual criminal charge or conviction, the answer is a definitive “no.” It is an invitation to respond. So, what is it exactly? A Wells…
While receiving an SEC subpoena is no small matter, it is not a definitive indication of trouble. Being the recipient of a subpoena does not necessarily mean you are being accused of wrongdoing or…