As a professional in the financial securities industry, you are well aware of the strict and complex rules and regulations governing this sector. Both the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) aim to protect the public from brokerage firms and individual financial advisors acting in bad faith. While there are professionals in every industry who may act in bad faith or violate codes of ethics in some way, the majority of people uphold the standards of professional conduct and act in ways that serve the interests of their clients and the public as a whole. Unfortunately, the SEC takes allegations of broker misconduct seriously, even if these allegations are based on misleading, erroneous, or even false information. If you are a financial advisor and you have just been informed that you are under investigation by the SEC for alleged securities fraud or negligence, it’s understandable to feel anxious and even intimidated by this news. Suddenly, your career and reputation have become uncertain, and you wonder what the upcoming weeks and months will bring. Before you assume the worst, reach out to an experienced and knowledgeable securities law attorney who can guide you through the SEC investigation process while defending your rights and protecting your best interests at every turn. Let’s take a look at what you can expect from the SEC investigation process and how enlisting the help of a trusted SEC defense lawyer can maximize your chances of obtaining a fair and favorable outcome.
Navigating the SEC Investigation Process
There are several ways that the SEC can decide to launch an investigation. According to the SEC, “The Division obtains evidence of possible violations of the securities laws from many sources, including market surveillance activities, investor tips and complaints, other Divisions and Offices of the SEC, the self-regulatory organizations and other securities industry sources, and media reports.” In other words, a customer complaint or tip from a media source can prompt the SEC to launch an investigation into an alleged securities fraud or negligence on the part of a financial advisor. Enforcement actions usually cover a wide range of issues, including securities offerings, investment advisory issues, securities offerings, market manipulation, insider trading, broker misconduct, and other forms of wrongdoing on behalf of a financial advisor or securities firm. Although the details will vary from case to case, an SEC investigation typically involves the following steps and procedures. Your securities fraud defense lawyer will help you prepare to face each step while advocating for your best interests at every opportunity.
SEC Notifies the Advisor or Securities Firm of the Investigation
The SEC will notify the financial advisor that they are the subject of an investigation into alleged securities fraud, negligence, or other misconduct. In some cases, the SEC will send the subject of the investigation an informal letter that asks them to produce relevant documents and attend a meeting with the SEC. In more serious or pressing cases, the SEC may issue a subpoena requiring the production or disclosure of documents and compel the individual to testify before the SEC. It can be overwhelming and stressful to receive an SEC letter or subpoena, but you do not have to face this challenge alone. Once you learn of an upcoming SEC investigation, contact a highly qualified SEC investigation lawyer as soon as possible to start discussing your options.
Participating in the SEC Investigation Process
The SEC investigation process tends to move slowly, as there are several rules and codes of investigatory procedures that must be followed along the way. You can expect to be asked to produce documents or provide information as part of the investigation. Depending on the scope and factors of the case, you and your SEC defense lawyer may try to negotiate a settlement or move through administrative proceedings to resolve the matter. Facing accusations of securities fraud or negligence can be stressful and concerning, so it’s best to rely on your securities fraud defense attorney to provide you with the courage and reassurance you need during this difficult time.
Closing the Investigation
An investigation can take several paths, depending on the details of the case and the findings of the Commission. In some cases, the investigation may conclude because it quickly becomes apparent that no enforcement action will be necessary or recommended. In other instances, the Commission may authorize an enforcement action, such as imposing a penalty of tens, hundreds, or even millions of dollars to account for the firm or broker’s wrongdoing. Regardless of the specific circumstances and factors involved in your SEC investigation, you can trust that your experienced securities law attorney will remain by your side at every stage of the investigation process.
The Benefits of Hiring a Securities Law Attorney
Even the most trusted and respected securities professionals are not immune from allegations of misconduct or wrongdoing. Unfortunately, a mere accusation—even a completely baseless one—can cause substantial damage to your professional reputation and career. As overwhelmed and anxious as you may feel in the face of these accusations, you must recognize that you do not have to navigate these stressful weeks and months on your own. Enlisting the guidance of a dedicated and highly qualified securities law attorney is the best way to face the future with clarity and confidence. Your attorney will examine every detail of your case and identify the most strategic path forward to keep your best interests protected at every turn. You can rely on your securities law attorney to answer your questions, address your concerns, and support you through every step of the SEC investigation process. With a trusted legal advocate in your corner, you can hold your head high as you work to keep your future as bright and secure as possible.
If you have been notified by the SEC that you are under a securities fraud or negligence investigation, contact Judex Law, LLC, right away at (303) 523-4022 to discuss your options with a dedicated and trusted securities law attorney.
