Last Updated on: 28th July 2023, 07:32 pm

SEC’s Vigilant Stand Against White Collar Crimes

The Securities and Exchange Commission (SEC) not only regulates the US securities market, but also takes an assertive stance against white collar crimes through its law enforcement division, the Enforcement Division. The active pursuit of charges against investment advisors, company executives, large companies, investors, and other entities, emphasizes the vital need for those contacted by the Enforcement Division to immediately consult with an experienced defense attorney.

A Dive into the SEC’s Enforcement Strategies

With the power to enforce a multitude of statutes and impose severe penalties, including hefty fines and long prison sentences, the SEC’s Enforcement Division is a force to be reckoned with. To maintain transparency and accountability, the SEC routinely publishes litigation releases announcing criminal sentences, securities litigations, and civil charges brought against companies and investors. Furthermore, the Enforcement Division releases an annual report detailing their work and strategies.

Looking to the Future: 2019 Report Highlights

In their 2019 report, the SEC reiterated their dedication to pursuing penalties regarding securities fraud violations and shared their primary focus on investors, individual accountability, and the advancement of technology. Additionally, the Division will continue to utilize remedies to further the agency’s goals and assess the allocation of their resources. Bearing these principles in mind, the fiscal year of 2019 saw a wide array of different enforcement actions unfold.

SEC Fraud Defense: Targeting the Ever-Changing Landscape of Fraud

The SEC diligently targets companies and individuals who are suspected of harming single investors through fraudulent actions. Considering the vast range of methods to commit fraud, the SEC has to continually evolve and adapt by broadening their technology and reassessing their resources. This approach has allowed them to navigate complex, emerging industries susceptible to fraud, such as:

Cryptocurrency Fraud

Cryptocurrency, an increasingly popular digital currency, has quickly become one of the largest targets for fraud. Fraudulent coin offerings, blockchain investment scams, and other forms of fraud involving Bitcoin or hundreds of other cryptocurrencies, have been on the rise. The SEC’s constant quest for innovation ensures they address this novel industry within the bounds of the law.

Cannabis and CBD Investment Fraud

Companies committing cannabis-related fraud are often found guilty of money laundering and charges related to criminal activity, adding another sector requiring strict SEC oversight.

Mobile Investing and Trading Apps

Financial apps being released by companies across all sectors must comply with federal laws. Failure to apply proper oversight can lead to fraud charges, especially if the violations result in users losing money.

Email, Mail, and Social Media Solicitations

Fraud investigations often begin through email, mail, and more recently, social media solicitations. The SEC has stringent marketing rules regarding these channels, and noncompliance can result in severe penalties.

Biomedical and High-Technology Investment Scams

The SEC scrutinizes companies offering potentially fraudulent investment opportunities with experimental technology. To remain compliant, these companies must follow the SEC’s rules about transparency, complete required paperwork, file and register their company, and sign up for exemptions.

Common Fraud Investigations Actions

There are numerous actions that can lead to an SEC fraud investigation, which include but are not limited to:

• Misrepresenting or omitting crucial information when pitching to investors;
• Manipulating the price of certain securities on the market;
• Stealing funds or securities of customers and investors;
• Engaging in insider trading;
• Partaking in the sale of non-registered securities.

Given the SEC’s commitment to enforcing penalties and its ever-evolving approach to tackling fraud, anyone contacted by the Enforcement Division should seek legal counsel immediately. With new industries and methods of fraud developing, being proactive with a solid defense can potentially protect you from severe penalties and damage to your reputation.