As a result of the rules and exceptions discussed above, simply certifying an inaccurate financial statement should not make a CFO liable under either Section 302 or Section 906 of the Sarbanes-Oxley Act (SOX).…
The SEC typically initiates its investigations targeting companies (as well as their senior executives, outside directors, and individual employees) following referrals from other agencies, news reports, whistleblower complaints, or suspicious activity flagged by the…
FINRA stands for the Financial Industry Regulatory Authority. Unlike the Securities and Exchange Commission (SEC), FINRA is a self-regulatory organization overseen by the SEC, not a federal government agency. FINRA’s jurisdiction is, at present,…
The SEC regularly brings enforcement actions against public company directors, as well as public companies and senior corporate executives. In civil SEC enforcement matters, the SEC can target individual board members, regardless of their…
How Can This Lead to Parallel Proceedings? What Other Additional Exposure Could There Be? How Can an Independence Conflict Create Additional Liability? What Types of Relationships and Services Are Generally Regarded as Impairments to…
The SEC’s Division of Enforcement investigates potential securities law violations, and its teams typically include attorneys and staff accountants. Along with the Securities Exchange Act of 1934’s provisions, the SEC’s rules require that the…
Attorney-client privilege does not apply automatically to every aspect of an SEC enforcement proceeding. In fact, maintaining the attorney-client privilege during an SEC investigation requires a detailed understanding of the law and focused legal…
According to Rule 21F-9 of the SEC Rules and Regulations, a person may file a whistleblower tip “anonymously, provided that the person is represented by counsel.” However, even with counsel, SEC whistleblowers must disclose…
Section 20(e) authorizes the Commission to enforce securities-law violations against any person who “knowingly or recklessly” provides “substantial assistance” to another person or entity who violates any provision of the federal securities laws. To…
The SEC’s accounting investigations center on two primary areas: false accounting practices and misleading financial disclosures. If these violations are believed to be criminal in nature, the case will be referred to the U.S.…