A NY Securities Fraud Lawyer Explains SEC Fraud Enforcement
In 1934, the Securities Exchange Act created the Securities and Exchange Commission (SEC). The SEC was created to help restore investor confidence following the October 1929 stock market crash. Today, the SEC interprets and enforces federal securities laws including the Securities Act of 1933. The SEC also issues and amends rules regulating securities trading; oversees brokers, investment advisors, and securities firms; and oversees private regulatory organizations in both the securities industry and the accounting industry.
The SEC’s Enforcement Division enforces the laws, rules and regulations designed to ensure that publicly-traded companies and financial professionals do not defraud investors or engage in schemes or artifices. The SEC may bring civil actions or administrative actions seeking civil penalties or the return of illegal profits. The SEC also works with federal law enforcement agencies to investigate potential crimes and bring charges that could result in lengthy prison sentences.
When you are being investigated by the SEC, you need an attorney who is prepared to respond to criminal actions, administrative hearings before an administrative law judge, and civil actions. Bukh Law Firm, PLLC attorneys are experienced with federal and state investment fraud crimes. We can help you to develop a strategic defense that allows you to reduce the chances of penalties that can affect your finances, your career opportunities and your freedom.
Call today to schedule a consultation and learn more.
What is SEC Fraud
The SEC investigates many different types of fraud schemes including:
- Misrepresentations or omissions related to a company’s financial condition.
- Misrepresentations or omissions related to the purchase or sale of securities.
- Market manipulation schemes including pump and dump schemes.
- Schemes involving embezzlement of funds or securities.
- Stock broker fraud or misrepresentation.
- Insider trading.
- Schemes involving the sale of unregistered securities.
The SEC has an Office of the Whistleblower to encourage those with information about SEC fraud to come forward and report potential securities law violations. The Commission has been authorized by Congress to provide financial rewards when tips are provided leading to an enforcement action that generates $1 million or more in sanctions. Whistleblower incentives are a tremendous enticement prompting people to come forward and report potential securities fraud.
How Does an SEC Fraud Investigation Work?
When the SEC has reason to believe fraud has occurred or suspects that any securities laws were violated, the Enforcement division engages in a multi-part investigation. The SEC may:
- Conduct an informal inquiry
- Interview potential witnesses
- Review trading data
- Examine brokerage records
- Issue subpoenas to compel the production of evidence, including financial records.
- Issue subpoenas to compel witnesses to testify.
- Team up with other law enforcement agencies including the Federal Bureau of Investigation to determine if a fraud scheme was being perpetrated.
If you are under investigation by the Securities and Exchange Commission, you need an attorney. Your lawyer will help to protect your Constitutional rights, including the right not to incriminate yourself, the right to remain silent, and the right to be free from an unlawful and unreasonable search. Do not try to handle an investigation or interrogation on your own as you could be giving the agency the information they need to pursue civil, administrative or criminal actions.
SEC Fraud Actions
The SEC may decide to bring a civil case in federal court or may decide to seek sanctions through the administrative process. The SEC can also work with law enforcement to press criminal charges.
- A civil action may result in an injunction preventing future fraudulent behavior, as well as civil monetary penalties and the return of profits that were illegally obtained (this is called disgorgement). A civil action could lead to contempt charges for those who violate court orders, or could result in someone being barred from serving as a corporate director or officer in the future.
- An administrative action involves a hearing before an administrative law judge. The ALJ will make a decision on issues presented and may recommend sanctions including suspensions of broker-dealer or investment advisor registration; a cease-and-desist order; civil monetary penalties; disgorgement; and an order to refrain from associating with the securities industry.
- A criminal action can result in decades of jail time. S. Code Section 1348 imposes a potential penalty of 25 years in prison for executing, or attempting to execute, schemes or artifices in connection with securities and commodities. Defendants in criminal cases often face multi-count indictments, alleging violations of multiple federal laws prohibiting fraud and investment crimes.
Bukh Law Firm, PLLC has experience with all types of investment and securities fraud cases and can help you to defend yourself against all legal actions pending against you.
How a Securities Fraud Lawyer Can Help
Do not try to handle SEC fraud investigations alone- there is too much at stake. Turn to a trusted NY criminal defense lawyer with extensive experience on investment fraud and securities fraud cases. Bukh Law Firm, PLLC has represented banks, brokers, investors and other financial professionals in SEC proceedings.
Give us a call to schedule a consultation and learn how we can put our legal knowledge to work for you.
