My Business is Being Investigated by the Securities and Exchange Commission (SEC), What do I do?

The United States Securities and Exchange Commission (SEC) is a powerful body.  It has the authority to investigate suspected violations in business or accounting practices, bankruptcy cases, and business transactions of any kind, involving:

  • Companies
  • Brokerage firms
  • Individuals

The agency, drawing on a broad range of business and commerce-related statutes and regulations, can and will investigate and pursue cases against all of these entities.  We’ll summarize how they go about it, and what you can do to minimize the impact of an SEC investigation on you and your business.

How the SEC Works its Investigations

An investigation by the SEC may start in one of two ways:  informal or formal.

Informal SEC investigations usually begin with a letter, requesting either a meeting or requesting to see specific documents from you.

Formal SEC investigations begin with a subpoena, requiring you to either testify before the SEC, or produce documents that they request.  They typically ask to see specific documents before moving ahead with a request for testimony.

In either case, you need to respond quickly and appropriately, in order to minimize the whole process.  Getting the help of a top litigation attorney experienced in business law and SEC investigations is imperative when responding appropriately to any type of SEC action against you.

Your case could go in one of two directions:

  • Civil action by the SEC
  • Criminal action, involving the United States Department of Justice

Your best course of action is to promptly respond to any contact or request, usually with the help of counsel, to try and avoid the initiation of a case against you.  There are several steps and strategies you can adopt here — an experienced lawyer will know the correct ones for your situation.  The primary goal should be to persuade the SEC to close its investigation.

How Alleged SEC Violations Can Impact Your Business

Getting investigated and accused of violations by the SEC can severely damage the interests and operations of any business, including yours.

The process can be very time-consuming, and stressful for everyone involved.  This is why it is so important to contact legal counsel early.  Minimizing the burden on you, your staff, and your business should be at the forefront of your plan.  Your lawyer can help get the case closed as early as possible.

Should an SEC investigation against you become public, it could adversely impact your reputation, stock valuation, and perception of you in the marketplace.  Once again, your lawyer can play a crucial role in minimizing this type of effect on you and your operation.

The Best Advice Regarding an SEC Investigation

The best thing you can possibly do is get the case closed down as early as possible.  Our knowledgeable litigators here at TencerSherman aggressively fight for our client’s rights in any security matter.  If you are in need of sound legal counsel regarding any issues related to the Securities and Exchange Commission, schedule a consultation today.