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What happens during an SEC investigation?

On Behalf of | May 11, 2022 | Uncategorized

Securities and exchange issues are complex. If the U.S. Securities and Exchange Commission believes you did anything to create an unfair advantage within the securities or stock markets, it may decide to launch an investigation into you, your New Jersey business or both.

Per the U.S. Securities and Exchange Commission, the SEC often works in close conjunction with local law enforcement agencies to investigate and prosecute criminal cases. The facts uncovered during these investigations remain private. During the SEC investigation, investigators may review any number of areas to gather evidence, including trade data, brokerage records, witness statements and so on.

Violations that may lead to SEC investigations

You may become the subject of an SEC investigation if the commission believes you committed any number of offenses. If the commission suspects you omitted or misrepresented information about securities, then it may decide to investigate further. The same holds true if the SEC suspects you might have manipulated securities prices, stolen funds or securities or sold unregistered securities. Engaging in insider trading or violating responsibilities with regard to treating customers fairly may also lead to an SEC investigation.

Actions that may follow SEC investigations

Depending on the evidence it uncovers, the SEC may decide to either have you appear before an administrative law judge or move your case to federal court. If the commission decides to move forward with an administrative action, it may also ask for an injunction mandating that you stop engaging in certain acts in the meantime.

If you receive a subpoena dictating that the SEC plans to investigate you or your business, consider contacting an attorney well-versed in such issues before responding to the subpoena.