Securities Enforcement and Criminal Fraud Investigations

Saturday, May 30th, 2009

The grand jury and U.S. Attorney’s Office conduct federal criminal investigations. This may or may not simultaneously occur with an investigation from SEC (Securities and Exchange Commission). In addition, you may want to know the following:

• -You may assert Fifth Amendment privilege against self-incrimination to your statements in any litigation or SEC investigation.
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• -SEC investigations are typically civil enforcement actions. They usually seek civil money penalties, ill-gotten gains’ disgorgement, and injunctive relief.
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• -Evidence obtained during litigation or SEC investigation may be used for criminal prosecution by U.S. Attorney’s Office.
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• -However, a SEC investigation doesn’t automatically lead to criminal or grand jury investigation.
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• -In a SEC investigation, you can present reasons why you should not be sued. This is best done with a good lawyer by your side.
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• -Some proceedings instituted administratively may also result from a SEC investigation. These are heard before SEC’s administrative law judges.
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• -SEC may seek an order to bar clients from working in their industry, e.g. stock promoters, broker-dealers, etc. if they participated in a scheme to manipulate or defraud stock prices.
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• -The SEC may also bar members of their board of directors or company officers from serving in their positions when a suit has been filed against them based on a fraudulent scheme or any scheme used to manipulate stock pricing.
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Tags: Criminal, grand jury, lawyer, SEC, SEC investigation, U.S. Attorney's Office
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