123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Business >> View Article

When The Sec Investigates

By Author: Brenda Hamilton
Total Articles: 62

No company wants to become the target of a Securities and Exchange Commission (“SEC”) investigation, and no investor welcomes an inquiry into a stock he holds. Issuers and shareholders alike need to understand how an investigation begins, how it proceeds, and how it may end.

If the SEC determines that someone has committed wrongdoing, it may ultimately decide to bring a civil SEC Enforcement action in federal court or bring an SEC adminisrative action before an administrative law judge. If it feels a criminal prosecution is warranted, it may refer the matter to the Department of Justice (“DOJ”). It may also request and receive assistance from securities regulators and law blog enforcement agencies worldwide.

Sources of SEC Information

Information that may lead to an SEC investigation comes from a variety of sources: internal market surveillance, tips and complaints from the public, referrals from the Financial Industry Regulatory Authority (“FINRA”) and the national exchanges, and media reports.

SEC investigations are always private and confidential; the SEC will disclose no information whatsoever, including whether a company is under investigation, unless and until an SEC action is brought. Most begin as a Matter Under Inquiry (“MUI”). During the MUI stage, facts are developed through informal inquiry. Witnesses are interviewed, brokerage records examined, trading data are reviewed. Sometimes an MUI leads directly to litigation; other times, it progresses to a formal order of investigation. At that point, staff may subpoena witnesses, require document production, and take depositions.

When the SEC investigation is substantially complete, the SEC’s staff will decide whether it feels an enforcement action is warranted. If it is, they’ll issue a Wells notice to the company and/or the individuals it expects to name. It will also present its findings to the SEC, which has the last word on whether the action will go forward. If the go-ahead is given, the SEC will file in federal court, or, alternatively, commence an SEC administrative proceeding.

In many cases, the SEC and the parties to the enforcement action agree to settle out of court. This saves time and money for the SEC and the defendants alike.

SEC SEC Action Investigation Triggers

Common violations that may spark an SEC investigation are:

• Misrepresentation or omission of material information about securities;

• Manipulation of the market price of securities;

• Theft of customers’ funds or securities;

• Violation of a broker-dealer’s responsibility to treat clients fairly;

blog Insider trading; and

• Sales of unregistered securities.

SEC Civil Actions

The U.S. District Courts offer a variety of remedies that may be sought by the SEC. These include SEC injunctions prohibiting further violations of securities laws, and, in extreme cases, asset freezes or special supervisory arrangements. The SEC can also seek monetary penalties, including the imposition of fines and the return of illegal profits (“disgorgement”). If individuals are among the defendants, they may be barred from acting as an officer or director.

SEC Administrative Actions

Administrative proceedings are different from civil lawsuits in that they are heard by an administrative judge (ALJ) who works for the SEC but is independent of the SEC. As with civil suits, the defendants often agree to a settlement. If they don’t, the matter continues to an administrative hearing, at which SEC staff and the defendants blog present evidence. The judge will render an initial decision that includes findings of fact and legal conclusions, along with recommended sanctions. The final decision is left up to the Commission. Possible sanctions include disgorgement, cease and desist orders, suspension or revocation of broker-dealer and investment advisor registrations, censures, bars from association with the securities industry, and termination of a securities lawyer or accountant’s right to practice before the SEC.

Typically, the SEC is Brenda Hamilton slow to initiate investigations. But once they’ve decided to do so, they leave no stone unturned, and they rarely lose a case. Public companies should do everything possible to avoid attracting the interest of the SEC’s Enforcement Division.

For more information about this blog please visit http://www.securitieslawyer101.com

For further information about this article, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton Florida,
at 561-416-8956 or visit http:www.securitieslawyer101.com.

Total Views: 71Word Count: 681See All articles From Author

Business Articles

1. How To Become A Financial Advisor - Demands And What To Anticipate
Author: Ian Marsh

2. Have You Found The Problem In Your Washer And Dryer?
Author: clearventnyc

3. The Best Ways To Keep Your Washing Machine In Best Condition
Author: clearventnyc

4. How Quality Changes With Formats?
Author: alphadvdcreations

5. How File Transfer Have Change The Media World?
Author: alphadvdcreations

6. Medical Aesthetics Market Report Provides Sizes Of Key Regional Markets Using Yardsticks Of Processe
Author: Pramod

7. Material Handling Lift Tables
Author: Compliance Solutions

8. Opportunities For The Global Frp Pipe Market To Reach $4.2 Billion By 2023
Author: Lucintel

9. Things To Consider Before Buying Interior Shutters
Author: zunaid galiem

10. On Demand Taxi Booking App Application Script
Author: sam sami

11. Movers And Packers Hosur To Bangalore In India Unionpackers
Author: Google

12. Dental X-rays
Author: Welcome to Master Dental, home to Astoria, NY dent

13. Picket Sections
Author: Quality Fence USA specializes in extruding PVC Vi

14. Follow 5 Tips For Choosing Suitable Invisible Grill For Balcony
Author: Deepaksharma

15. Moving In Winter: Top 9 Strategies To Make Your Winter Move Bearable!
Author: Rakesh Kr

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: