SEC ENFORCEMENT ACTIONS
When the sec comes calling
The U.S. Securities and Exchange Commission (“SEC”) investigates potential violations of the federal securities laws. The SEC’s Division of Enforcement handles all agency investigations. These investigations are generally nonpublic.
During an investigation, documents and testimony may be voluntarily provided or they may be required in response to a subpoena.
Regardless of whether you have been contacted informally or by a subpoena, it is important to retain experience counsel to guide you through the process. How you respond to the initial inquiry, and how you manage the events as the investigation continues can significantly impact the outcome of the investigation.
If contacted, do not have discussions directly with the investigators. If you ignore this rule, you must be candid and truthful as any false statements can be the basis for a felony charge.
All enforcement actions brought by the SEC are civil in nature. The SEC has no authority to bring criminal cases.
How we can help
- We will help you manage the process to minimize the impact on your business.
- On your behalf we will contact the enforcement staff and attempt to determine as much as possible about nature and scope of the investigation.
- If necessary we will represent you to protect your interests during any informal interview, while giving testimony or in response to any administrative or judicial enforcement action.
- Where appropriate, we will also work on your behalf to negotiate a favorable settlement of the matter.
- Once contacted, you will need to insure that documents, emails and notes, including electronic notes, are maintained and not destroyed. Destroying evidence after learning of an investigation can be worse than the outcome of the original investigation.
What is a wells notice?
If the SEC staff believes that charges are appropriate, it will send a “Wells notice” to the company or individuals against who it believes enforcement action should be take. The Wells notice will: (1) inform you that the staff has made a preliminary determination to recommend that the Commission file an action or institute a proceeding; (2) identify the securities law violations that the staff has preliminarily determined to include in the recommendation; and (3) provide you with notice that you may make a submission to the Division and the Commission concerning the proposed recommendation.
The recipient of a Wells notice may also request to review non-privileged portions of the staff’s investigative file as well as request a meeting with the staff to discuss the substance of the allegations.
To discuss how we can help you with in responding to any Securities Enforcement Action, contact us by email or call 601-957-3101. Our office is located in downtown Jackson, MS, just off I-55.