How a White Collar Defense Attorney Can Challenge Your Securities Fraud Charges

Securities fraud charges can have devastating consequences for individuals and businesses. Being accused of deceiving investors or manipulating financial markets can lead to substantial fines, damaged reputations, and even imprisonment. However, an experienced white collar defense attorney has various strategies to challenge these allegations. Here’s an overview of how a skilled lawyer can defend you against securities fraud charges:

Understanding the Allegations

The first step is to thoroughly understand the specific allegations against you. Securities fraud encompasses many potential violations[1] such as:

• Insider trading
• Accounting fraud
• Misrepresentations or omissions in disclosures
• Manipulating share prices

Pinpointing the exact claims will allow your attorney to craft targeted defenses. They will review the SEC’s complaint and evidence closely to identify weaknesses.

Challenging the Evidence

In many cases, the SEC’s allegations rest on circumstantial evidence[2]. Your attorney can challenge how the SEC is interpreting phone records, emails, financial records and other documentation. For example, they may argue that the SEC is drawing unreasonable inferences from the evidence.

Skilled cross-examination of SEC witnesses can also undermine the factual foundations of the case. Your attorney may be able to show witnesses have incomplete knowledge or are making assumptions.

Attacking Faulty Legal Theories

The SEC may also be advancing novel or flawed legal theories[3]. Your lawyer can file motions contesting the SEC’s ability to bring charges under certain statutes. They can argue the facts don’t actually constitute violations under established precedents.

Focusing on Intent

Securities fraud requires showing the defendant intended to deceive, manipulate or defraud investors[4]. Your attorney will scour the evidence to demonstrate you acted in good faith and did not mean to break the law.

Showing that you followed advice from legal counsel or accountants can be helpful here. The lack of intent can defeat the charges or lead to lighter penalties.

Compliance Programs

If you had strong compliance programs in place at the time, your lawyer can use this to cast doubt on the SEC’s allegations[4]. The existence of policies, training and monitoring to prevent violations undercuts claims that fraud was willful.

Cooperation

In some cases, it may be beneficial to cooperate with the SEC’s investigation, such as by providing additional documents or agreeing to interviews[5]. This good faith can persuade the SEC to drop or reduce the charges. However, your attorney has to carefully weigh the risks and benefits here.

Settlement Negotiations

Your lawyer will likely engage in extensive settlement talks with the SEC[5]. Very few SEC cases go to trial. Negotiating a favorable settlement allows you to avoid the expense and unpredictability of litigation. Your attorney’s experience with SEC settlements will be invaluable.

Parallel DOJ Investigation

If the Department of Justice has opened a parallel criminal investigation, that substantially raises the stakes[4]. Your attorney will need to handle the civil and criminal cases in a coordinated way. Settlements and admissions in one matter can impact the other.

Responding to Wells Notices

If you receive a Wells notice indicating the SEC plans to bring an enforcement action, your attorney can draft a Wells submission that dissuades them from doing so[5]. These detailed written arguments can prompt the SEC to drop the matter.

FINRA Arbitrations

The SEC often coordinates with the Financial Industry Regulatory Authority (FINRA) [5]. If FINRA brings arbitration proceedings over the same allegations, your lawyer can defend you in this forum as well.

Handling Whistleblowers

If the investigation was prompted by a whistleblower complaint, your attorney will need to assess whether the whistleblower has credible firsthand knowledge[5]. In some cases, they can undermine the whistleblower’s account.

Corporate Executives

For corporate executives accused of enabling securities fraud, your lawyer will aim to show you acted properly to prevent misconduct and had no intention to break the law[4]. They will also advise on how to avoid charges of making false statements to investigators.

Sentencing Mitigation

If you do end up pleading guilty or being convicted at trial, your lawyer will advocate for minimized penalties[4]. They will cite factors like your clean record, cooperation, acceptance of responsibility and good faith reliance on professionals.