SEC Fraud Defense in Los Altos, California

Attorney John W. Sellers
SEC Defense Team Lead
Former DOJ Trial Attorney

The securities market is not the only matter under the purview of the U.S. Securities and Exchange Commission (SEC). The agency has a broader range of faculties that includes, among others, the prosecution of financial wrongdoings through its Enforcement Division, which could entail millions of dollars in penalties and even jail time.

If you’re a financial professional in Los Altos, California who has become aware of a possible investigation being carried out against you by the SEC, you ought to procure the aid of an SEC fraud defense lawyer from Oberheiden P.C. Our team is composed of highly qualified professionals in the field of securities legislation and SEC-related matters who are capable of reviewing your case and planning the most optimal defense strategies in order to secure a positive outcome.

Securities Laws and Conduct Covered by the SEC

The SEC is in charge of enforcing securities laws at a federal level. However, each state has its own securities legislation – identified by the moniker “Blue Sky Laws” – which is enforced by state authorities, but only applicable to securities offerings and professionals within that state.

The SEC’s Enforcement Division is in charge of fraud allegations and other misconduct carried out during a securities trade. The aforesaid department can impose or procure the imposition of penalties for infringement of a plethora of federal financial laws. The legal framework under which the SEC exerts its authority is comprised of the following legislation:

The Securities Act of 1933
The Securities Exchange Act of 1934
The Foreign Corrupt Practices Act
The Dodd-Frank Act
The Sarbanes-Oxley Act

The content of these laws is quite broad in meaning and scope. The rather vague and ample nature of many of the provisions contained therein is underpinned by the alleged necessity to protect investors against new deceitful practices which would not be deemed punishable if more precise wording was utilized.

These are some of the most common charges that the SEC can bring forward in accordance with the laws mentioned above:

Misrepresentation or Omission of Material Information

A very typical financial wrongdoing that hurts investors’ interests is the misrepresentation or omission of material information.

Omission, in this case, consists of a failure on the part of the seller to provide important material facts to the investor about a transaction that, if known, would have otherwise resulted in the latter’s withdrawal from the agreement. This omitted information would have to be about a material fact (not an immaterial fact or mere opinion) and deemed relevant to the decision-making process.

On the other hand, a misrepresentation involves a downright false or misleading statement of a material fact that would lead the investor to execute a trade order.

The SEC defines these actions as investor fraud and has historically persecuted offenders with a heavy hand.

Theft or Embezzlement

Financial professionals are said to perpetrate embezzlement when they use funds placed in their trust by clients for purposes other than intended (generally of a personal nature). They would usually take money from clients with the promise of investing it, only to deviate the funds for personal use or move them to their bank accounts. Apart from constituting a securities violation, embezzlement is also a prosecutable crime that could prompt the involvement of criminal enforcement agencies in conjunction with the SEC.

Insider Trading and Trades during Blackout Periods

Insider trading is a form of violation in which certain high-ranking executives, directors, or insiders take advantage of nonpublic material information about the company to make the most profit out of its stocks. This is considered a securities law violation that hinges upon the privileged position of these insiders acting to the detriment of the securities market’s integrity.

Individuals occupying these positions are also barred from executing trades or buy/sell orders during certain periods (also called “blackout periods”). These are periods during which said individuals would be tempted to buy or sell in anticipation of the disclosure of relevant material facts that could severely affect the market conditions of the company’s securities. The transactions conducted during these spans of time could be construed as a form of insider trading, though they’re generally discouraged even when trading is not done on the basis of nonpublic material information (unless in the context of a pre-arranged plan).

Violation of Corporate Trading Policies

Companies are required to have exhaustive compliance policies, as well as mechanisms to bring awareness of these policies to relevant personnel. Infringement of these policies could entail civil, administrative, or criminal liability, depending on the nature of the breach.

How to Mount a Strategic Defense against SEC Allegations, Investigations, and Charges

We at Oberheiden P.C. take the necessary precautions and measures to make sure that you attain the most favorable and cost-effective results from an otherwise strenuous process. This includes devising a defense strategy that covers every possible and foreseeable scenario, after a careful internal review of the situation at hand.

In order to elude any potential exposure on your part or that of your company or firm, it’s imperative to follow a certain roadmap to ensure a successful defense:

Internal Investigations

For the purposes of garnering elements for your defense and correcting any failures susceptible to future sanctions, a thorough internal investigation should be undergone with the oversight and guidance of outside counsel. We have abundant experience carrying out and overseeing internal investigations, especially in the midst of insider trading allegations and other similar matters.

SEC Testimony and Document Production

The SEC, during its investigations, normally obtains incriminating records or testimonies through the issuance of a subpoena. The lawyers at Oberheiden P.C. are trained to prepare clients when they’re ordered to testify under subpoena so that they only speak in their best interest. Our lawyers can also assist in the production of pertinent documentation that doesn’t disclose data capable of being misconstrued or interpreted as violations of securities legislation.

Assessment of Potential Defenses

With all the information obtained during the course of the internal investigation, the SEC subpoenas, and other sources, our lawyers would be capable of scrutinizing all possible defenses. After all the elements have been considered, we would delineate a coherent defense strategy with a careful assessment of all the imaginable outcomes, whether they’re favorable or unfavorable.

Execution of the Defense Strategy

During our execution of the defense strategy, we entertain all other viable justifications that could arise and that were not analyzed before, incorporating them into our array of defenses. We are also able to represent our clients and speak with SEC officers and attorneys on their behalf, ensuring that the proceedings are carried out in line with their goals and preventing blunders that could thwart the effectiveness of their defense.

Frequently Asked Questions about SEC Defense in Los Altos, California

What Are the Penalties of a Securities Violation?

The penalties of a securities violation can be quite severe, although they normally only involve sums of money. The quantum of the penalties levied by the SEC can hover around the million-dollar range or beyond, depending on the impact and nature of the violation.

The SEC doesn’t impose civil sanctions on its own accord. Instead, it triggers the jurisdictional mechanisms through civil lawsuits, and the judge would declare whether the lawsuit has merit or not. Afterward, the judge would have to rule in the SEC’s favor so as to confirm the penalty. Whenever there is a suspicion of criminal liability, the SEC must forward the matter to a competent law enforcement agency.

Why Doesn’t Oberheiden P.C. Call Itself the Best SEC Fraud Defense Firm?

We let our records speak for us. As a law firm, we’re not allowed to use these adjectives to describe ourselves; it’s forbidden by current regulations on the subject of legal marketing.

We could, however, attest to the fact that our attorneys have joined us after building a strong career as lead prosecutors and investigators in the areas of financial fraud and securities violations. This has allowed them to have a privileged understanding of how enforcement agencies perform their duties, which would prove to be a crucial element in our victories.

What Are the Possible Defenses against Allegations of Insider Trading?

Possible defenses you may use include:

No access to (or non-reliance on) inside information.
Trades were made pursuant to a pre-arranged plan in accordance with SEC Rule 10(b)5-1.
Utilized “pieced together” usable public information.
Information was no longer nonpublic at the time the trade took place.
Reliance on the advice of legal counsel.

Are There Any SEC Offices in Los Altos, California?

The SEC doesn’t have regional offices in every location, county, city, or even state. As of this answer, there are no regional SEC offices in Los Altos or Santa Clara County.

That doesn’t mean that you are outside of the SEC’s reach. The SEC operates via 11 distinct regional offices that have jurisdiction over many of their surrounding states. Los Altos is currently under the jurisdiction of the San Francisco Regional Office.

Seek an Appointment with a Los Altos SEC Defense Lawyer at Oberheiden P.C.

If you require an SEC defense lawyer in Los Altos, California, contact us by calling 888-680-1745 or by filling out this contact form, and we will arrange a consultation meeting.