Securities & Financial Fraud
Public companies, broker-dealers, investment advisers and even unregistered investment fund managers are subject to civil and criminal enforcement action under the federal securities fraud statutes and their state counterparts. Banks and other financial services companies face enhanced scrutiny and liability for a range of transactions and conduct. For publicly-traded companies, commonly investigated allegations include misstatements of earnings, failure to disclose material adverse events, options backdating, and insider trading. The broker-dealer industry is subject to numerous statutory and regulatory proscriptions which can lead to criminal prosecution, including, on the investment banking side, market manipulation activities such as “frontrunning,” and on the retail side, violations of fiduciary duties to customers through deceptive representations, unauthorized trades, and “churning” customer accounts.
Investment fund managers—even those not required to register with the SEC—are particularly subject to liability for violations of the often-ambiguous Investment Advisors Act, which generally prohibits fraudulent conduct in managing investors’ assets and deceptive communications with investors. Recent enforcement trends include the SEC’s increasing resort to adjudication of securities fraud cases—even sizable cases requiring multi-week trials—through “administrative proceedings,” where defendants are afforded few due process rights and very little pre-trial discovery.
Successful defense of a securities fraud investigation requires a keen understanding of the relevant industry and the myriad statutory and regulatory provisions implicated by the alleged transactions. The experienced defense attorney will recognize at the outset the multiple fronts against which the target must defend, which frequently includes the SEC, DOJ, self-regulatory organizations such as FINRA, and corresponding state securities industry regulators. Related investor and customer lawsuits are commonplace as well, requiring lead counsel to manage the competing demands of parallel proceedings.
We have a strong track record in defending securities fraud cases and related proceedings, including threatened prosecutions against financial services companies. We represent registered and unregistered investment fund managers, public companies and broker dealers. We appear frequently before the SEC, FINRA, state securities regulators, and when necessary in the courtroom—or administrative proceedings—to fight for clients charged with a range of securities law violations. When necessary, we even file suit against the SEC to enjoin proceedings, and recently argued a case in the D.C. Circuit Court of Appeals challenging the constitutionality of Dodd-Frank and the SEC’s administrative enforcement process, the first lawyers to do so. We fight to prevent criminal indictment, then to undermine and defeat civil and regulatory charges—all to keep the client in business, avoid debarment and delisting, maintain registration status, and preserve the client’s reputation. Our defense team’s expertise in securities law is unparalleled.