Colorado SEC Defense Lawyers

Colorado SEC Defense Lawyers

Dealing with an SEC investigation can be stressful and frightening. But having an experienced SEC defense lawyer on your side can make all the difference. This article will give you an overview of SEC defense in Colorado – the key laws, strategies, and lawyers who can help.

What is the SEC?

First, a quick primer on the Securities and Exchange Commission (SEC). This federal agency enforces laws related to the securities industry. The main laws they enforce are:

• Securities Act of 1933 – requires companies to disclose certain information when issuing securities
• Securities Exchange Act of 1934 – requires companies to make periodic disclosures and oversee trading
• Investment Advisers Act of 1940 – regulates investment advisers
• Investment Company Act of 1940 – regulates mutual funds and other investment companies

The SEC has the power to investigate and bring civil enforcement actions against companies or individuals who violate these laws. Common violations include insider trading, accounting fraud, and failure to register securities or investment advisory services.

Why Hire an SEC Defense Lawyer?

If you receive a subpoena or inquiry from the SEC, it’s critical to hire an experienced SEC defense lawyer right away. SEC investigations can quickly spiral out of control, leading to huge fines or criminal charges. An SEC defense lawyer can help in several key ways:

• Evaluate your case and exposure – A skilled SEC lawyer can analyze the facts and help you understand potential violations and penalties.
• Guide you through the investigation – They’ll represent you through document requests, interviews, Wells notices, and negotiations.
• Craft a defense strategy – They’ll identify defenses and work to get charges dismissed or reduced.
• Negotiate settlements – An SEC lawyer can negotiate a favorable settlement if needed.
• Avoid criminal charges – In some cases, they can persuade the SEC to keep matters civil rather than refer them for criminal prosecution.

Having an experienced SEC defense lawyer in your corner can mean the difference between a slap on the wrist and serious civil or criminal charges. Their expertise in SEC rules and strategy is invaluable.

Key Colorado SEC Defense Lawyers

Colorado has many skilled SEC defense attorneys. Here are a few top lawyers to consider:

1. Troy Rackham – Spencer Fane

Troy Rackham is a partner at Spencer Fane with extensive experience in SEC enforcement and litigation. He’s represented companies and individuals in SEC investigations involving financial reporting, insider trading, and more. Clients praise his ability to analyze complex SEC rules and develop creative arguments. Rackham is based in Denver.

2. Jim Coyle – Steptoe & Johnson

Jim Coyle chairs the Securities Litigation and SEC Enforcement group at Steptoe & Johnson. His practice focuses on representing financial services firms and public companies in regulatory enforcement matters including SEC investigations. Coyle has handled high-profile SEC cases related to financial fraud. He works out of the Denver office.

3. John Chanin – Foster Graham

John Chanin is an experienced trial lawyer at Foster Graham who represents targets in SEC enforcement actions. He’s served as lead counsel in numerous SEC investigations involving broker-dealers, investment advisers, and public companies. Chanin has successfully avoided civil penalties and criminal prosecution for clients. His thoughtful approach has earned praise from peers.

4. Thomas Johnson – Gibson Dunn

Thomas Johnson co-chairs Gibson Dunn’s Securities Enforcement practice. He represents public companies, boards, and individuals in SEC investigations and enforcement actions. Johnson has deep expertise in accounting cases and regularly helps clients avoid criminal prosecution. He works out of the firm’s Denver and Washington D.C. offices.

5. Jim Jenkins – Holland & Hart

Jim Jenkins heads the Securities Litigation and SEC Enforcement team at Holland & Hart. He’s handled enforcement matters in nearly every SEC regional office. Jenkins is known for his ability to analyze complex trading data and develop creative arguments in insider trading cases. His clients include hedge funds, broker-dealers, and public companies.

Common SEC Defenses

When facing an SEC investigation, there are several defenses that experienced SEC lawyers may use to get charges dismissed or reduced. Here are some examples:

No Scienter

In fraud cases, the SEC must prove the defendant acted with scienter – intent to deceive or extreme recklessness. Showing the conduct was negligent rather than intentional can defeat fraud charges.

Reliance on Professionals

Reasonable reliance on accountants, lawyers, or other professionals regarding disclosure issues may rebut charges like accounting fraud.

Cooperation Credit

Cooperating fully with the SEC’s investigation, including providing key documents and testimony, may persuade them to drop or reduce charges.

Statute of Limitations

Civil charges must be brought within 5 years of the alleged misconduct, so statute of limitations arguments can dismiss stale claims.

Jurisdictional Arguments

The SEC’s jurisdiction has limits. Lack of a sufficient U.S. nexus for foreign transactions, for example:

Lack of Materiality

For misstatements or omissions to be securities fraud, they must be material – something a reasonable investor would consider important. Arguments that the issues were immaterial can defeat charges.

No Duty to Disclose

Companies generally only have a duty to disclose material information in SEC filings and other regulated communications. Defense lawyers may argue there was no duty to disclose in a particular situation.

Constitutional Arguments

The SEC’s authority has constitutional limits under the First Amendment, due process clause, etc. Constitutional claims may invalidate certain charges or proceedings.

Parallel Criminal Proceedings

Courts often stay civil SEC cases pending related criminal proceedings to protect a defendant’s Fifth Amendment rights.

Lack of Extraterritorial Jurisdiction

The SEC typically lacks jurisdiction over securities transactions that occur exclusively abroad, have no foreseeable U.S. impact, and involve only foreign actors[1]. Arguments against extraterritorial application of U.S. securities laws may defeat charges.

Challenging Investigative Procedures

Defense lawyers scrutinize the SEC’s investigative procedures for defects that could invalidate charges. This includes ensuring proper jurisdiction, adherence to statute of limitations, and following required protocols[2].

Settlement Considerations

Fighting SEC charges can be challenging, so settlement is often the pragmatic option. But settlement terms still matter. Experienced SEC lawyers will negotiate for:

• No admission/denial of charges
• Lower civil penalties
• No officer/director bar
• No criminal referral to DOJ

In some cases, lawyers can even negotiate a deferred prosecution or non-prosecution agreement to avoid civil litigation.

Avoiding Criminal Charges

A key benefit of skilled SEC defense is avoiding criminal prosecution, which may involve prison time. Civil charges have lower proof standards than criminal, so criminal referrals are selective. Lawyers aim to convince the SEC:

• Violations were negligent errors, not intentional fraud
• Reforms are implemented to prevent future issues
• A civil settlement provides sufficient punishment

Persuading the SEC to keep the case civil can save clients from catastrophic criminal consequences.

The Bottom Line

Facing an SEC investigation is daunting, but the right SEC defense lawyer can guide you through the process and achieve the best possible outcome. Look for an experienced SEC specialist who can analyze the facts, identify defenses, negotiate skillfully, and keep matters civil if at all possible. This gives you the greatest chance of minimizing penalties and avoiding criminal prosecution.