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What to do (and not to do) if under investigation by the SEC

On Behalf of | Nov 21, 2023 | White Collar Crimes

Allegations of securities fraud, such as insider trading and manipulating market prices, can pose significant legal and financial threats. If investigators find incriminating evidence, you could face civil and criminal penalties, costly fines, injunctions or even imprisonment.

Taking immediate action may help you avoid the most unfavorable outcome in your case. The following dos and don’ts can help you navigate what is sure to be a challenging journey once you discover the Securities and Exchange Commission (SEC) is investigating you.

Do these things

Consider obtaining representation as soon as possible to get an early assessment of your case and begin exploring your defense options. It can help you stay informed about your case and allow you to address challenges that may arise.

More steps to take:

  • Ensure you understand the allegations to mount a proper defense
  • Gather and preserve evidence and documentation related to the case
  • Be respectful and cooperate with investigators

Remember, the stress of an SEC investigation can take a toll on your mental and physical health. It may seem like a minor issue, but managing your stress and anxiety can help to ensure you make sound decisions.

Don’t do these

Sometimes, knowing what not to do can be as invaluable as knowing what you should do. Since you may be under scrutiny for some time, avoid doing the following things.

  • Do not speak with investigators without protection
  • Do not alter or destroy documents or evidence
  • Do not make major financial changes or decisions (large withdrawals, etc.)
  • Do not discuss the matter with anyone 

The SEC has powerful investigative tools that can uncover anything from an inadvertently incriminatory statement to the destruction of evidence. That is why it is critical to be mindful of your conduct and obtain legal protection if under investigation.