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Last Updated on: 18th September 2023, 10:06 pm
Navigating SEC Defense in New York City: A Guide for Companies and Individuals Facing Securities Fraud Charges
Being investigated or charged with securities fraud by the Securities and Exchange Commission (SEC) can be an incredibly stressful and complex ordeal. The SEC enforces federal securities laws that aim to protect investors by requiring full and fair disclosure by companies that issue stocks and bonds. Violating these laws can lead to huge fines, damaged reputations, and even criminal prosecution.
Luckily, experienced SEC defense attorneys in New York City can help guide companies and individuals through the investigation process and build a strong defense. This article provides an overview of common SEC charges, strategies for responding to investigations, and finding the right legal representation in New York City.
Common SEC Violations
Before diving into defense strategies, it helps to understand the most common activities that attract SEC scrutiny. Some of the top securities law violations pursued by the SEC include:
- Insider trading – Buying or selling securities based on material, non-public information.
- Accounting fraud – Falsifying financial statements and misrepresenting a company’s financial health.
- Pump-and-dump schemes – Artificially inflating a stock’s price through false or misleading statements, then selling shares before the price drops.
- Churning – Excessive trading by brokers aiming to generate higher commissions.
- Misleading information – Providing false or misleading information to investors about securities.
The SEC often pursues both companies and individuals like CEOs, CFOs, board members, brokers, and more. Even peripheral players like attorneys can face charges of aiding and abetting securities fraud.
Responding to Investigations
When facing an SEC investigation, having an experienced SEC defense lawyer on your side from the very beginning is crucial. Here are some tips for responding:
- Get ahead of it – If you suspect you may be under investigation, get out in front by hiring counsel and approaching the SEC before they come to you.
- Stay quiet – Assert your Fifth Amendment rights and avoid interviews or questioning without your lawyer present.
- Review documents – Your lawyer can help identify any problematic emails, reports, or other evidence.
- Negotiate resolution – In some cases, your lawyer may be able to negotiate a settlement and avoid litigation.
Having skilled counsel involved early allows you to get a handle on potential liability and explore different resolution strategies. Your lawyer’s relationships with SEC staff can also smooth the process.
Building an SEC Defense Strategy
If charges are filed, SEC defense lawyers have a variety of tactics for contesting them. Common strategies include:
- Demonstrating compliance – Showing that policies and procedures were in place to prevent violations.
- Questioning accuracy – Identifying errors or exaggerations in SEC allegations and evidence.
- Raising jurisdictional issues – Arguing that certain activities fall outside SEC authority.
- Attacking credibility – Undermining witness testimony through rigorous cross-examination.
- Presenting contrary evidence – Introducing documents, testimony, or expert analysis that contradicts SEC claims.
In some cases, even if underlying facts are true, skilled securities attorneys may get charges dismissed by showing the SEC lacks jurisdiction or is overreaching in its allegations. Settlement may also be an option to avoid litigation.
Finding the Right NYC Securities Lawyer for You
With so much on the line, it’s critical to have an experienced SEC defense attorney fighting for you. Look for a lawyer with specific expertise in securities laws and SEC enforcement. When researching options, consider:
- Experience with similar cases – Look for a robust history with comparable SEC charges.
- Local knowledge – Understanding New York judges, regulators, and processes is invaluable.
- Resources and expertise – Big SEC cases often require teams of lawyers, financial experts, investigators, and more.