SEC Fraud Defense in Silicon Valley, California

When it comes to anti-fraud, the Securities and Exchange Commission (SEC) aggressively pursues any company – whether large or small. This is especially true when a company actively seeks investment funding and may mislead potential investors about its financial health. The agency obtained a whopping $3.8 billion in 2021 in penalties and disgorgements.

Silicon Valley address – by appointment only:
4500 Great America Pkwy
Santa Clara, CA 95054
888-680-1745

SEC Has National Jurisdiction Including Silicon Valley, California

The SEC’s San Francisco Regional Office is located at 44 Montgomery Street. The agency has teams of attorneys and investigators to investigate securities fraud across a wide swath of industries, from technology to entertainment to real estate.

SEC Enforces Many Securities Laws

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

The Enforcement Division of the SEC is the primary law enforcement agency for violations of federal securities laws. A violation of federal securities laws is not a crime, but it is a civil matter and carries significant penalties. The SEC often works hand-in-hand with state or local law enforcement or government agencies to prosecute criminal activity related to federal securities laws violations.

The SEC has broad authority to pursue virtually all kinds of misconduct related to purchasing and selling stocks, bonds, and other investments. While you may know that fraud can give rise to an SEC investigation and enforcement action, many laws are within the SEC’s jurisdiction for enforcement. Some examples include:

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

SEC Investigates Different Kinds of Fraudulent Activities

The Securities and Exchange Commission (SEC) investigates various fraudulent activities in California. Fraudulent activities can include, but are not limited to:

Stock Manipulation

The SEC defines stock manipulation as “an intentional conduct aimed at deceiving investors by either controlling or artificially affecting the market for a security.” This includes wash sales, matched orders, painting the tape, and other illegal practices.

False and Misleading Statements

The SEC considers false and misleading statements about a company’s finances or business prospects to be a fraud. It is also illegal for corporate officers to hide information that would make investors cautious about investing in the company’s securities.

Insider Trading

Insider trading involves buying or selling securities based on information not available to the public. The SEC penalizes anyone who buys or sells a security while accessing material non-public information. The person who provides this information may also be held accountable.

Failure to Report Suspicious Activity

All broker-dealers must immediately report any suspicious activity on their clients’ accounts. If an employee believes that one of their clients has engaged in money laundering, they must file Suspicious Activity Reports (SARs). Failure to do so could result in legal penalties for both the employee and their brokerage firm.

SEC Penalties and Sanctions

Civil money penalties

The SEC can bring civil actions to recover the money you lost while making your investment. The agency won’t be able to return all of the lost investments, but they will force the responsible party to pay back what they stole and any interest earned on top of it.

Criminal charges

If the SEC finds a clear instance of fraud, they can work with the Department of Justice (DOJ) to pursue criminal charges against whoever was responsible for breaking the law. In these cases, the punishment can include jail time or fines paid directly to the federal government.

Charges against individuals or companies

If an individual or company is found guilty of committing fraud or otherwise breaking securities laws, the SEC has a few options for choosing its next step. It could choose to go after either party and both parties to ensure everyone who played a role in committing fraud gets punished appropriately.

Charges against executives

The SEC can impose penalties on executives at any level within your organization if it finds them guilty of violating securities laws. Everything from the CEO to department heads and managers is at risk if their negligence leads to financial misconduct.

If you’re one of those people and get charged with a crime by the SEC, you need an experienced SEC fraud defense attorney in your corner immediately. Otherwise, you could lose your job and face fines or jail time, and possibly be barred from participating in any public offering ever again.

How Companies in Silicon Valley May Risk SEC Enforcement Action

The SEC is responsible for going after fraud cases and protecting investors, but sometimes the SEC gets it wrong and goes after companies that are not committing fraud. The SEC regularly investigates companies seeking funding from investors. These investigations can take a serious toll on companies.

Silicon Valley is home to some of the world’s most innovative tech companies. The Securities and Exchange Commission (SEC) has zeroed in on startups that handle huge sums of money, especially when or after going public.

SEC Defense Requires a Federal Criminal Defense Lawyer

The most important thing you need in a federal criminal defense lawyer is experience fighting the SEC. Most SEC defense lawyers are not good trial lawyers. Few have even taken a case to trial.

That’s because securities law works differently than other areas of law. It requires an understanding of finance, markets, and business that many lawyers do not have, let alone the ability to explain to a jury.

You cannot afford to make this mistake when choosing an attorney for your SEC investigation or white-collar criminal matter in California. The stakes are too high, and there is too much on the line for you, your family, and your company.

Get a lawyer Who Does Defense for the Securities Industry.

There are many good reasons to hire a lawyer who has done prior defense work for the securities industry. Here are three of them:

Dealing with SEC Investigations

Securities industry defense lawyers know how to deal with the SEC’s investigative process. The Securities and Exchange Commission is the most well-known regulator that oversees securities trading and transactions, investment businesses, and the exchange markets.

If the SEC comes knocking on your door, you want a lawyer who can help you respond to their requests while protecting your business interests. A knowledgeable legal representative will understand how to communicate with investigators and strive to make sure their position is clearly stated in any documents or other information provided to regulatory officials.

Advising on Compliance

Securities industry defense lawyers know about regulations governing issuers of securities. One aspect of securities law involves an issuer’s compliance with existing requirements related to communications about offerings or pending sales of investments in a company or venture. Again, an issuer of securities needs legal representation from someone who understands what rules apply and knows how those rules might apply in different situations.

Shrewd Representation

Securities industry defense lawyers know about regulations concerning broker-dealers, hedge funds, mutual funds, etc. There are various types of businesses that must comply with regulations related to investment advice given by representatives employed by that company – even if there is no wrongdoing involved but simply a misunderstanding between two parties, it can be comforting for either side involved in that disagreement to have reliable legal assistance available when necessary.

Let the Oberheiden P.C. SEC Defense Team Help You

Oberheiden P.C. is a white-collar criminal defense law firm highly experienced in SEC defense matters, having represented clients against the SEC and other federal agencies nationwide and successfully resolving numerous cases before charges were ever filed. The firm also has extensive trial experience and has handled litigation in federal courts all across the country.

Suppose you or your company are faced with a potential SEC investigation. In that case, it is best to hire our experienced counsel as early on as possible to give yourself a chance at avoiding liability altogether.

Here are three ways that our experienced attorneys can help you:

Determine whether there is probable cause for an investigation, i.e., whether the government could potentially bring charges against you;
Explore settlement options before the SEC brings formal charges; and
Prepare for trial if the government does press forward with formal charges against you or your company

Frequently Asked Questions

If you are looking for a Silicon Valley SEC defense lawyer, you likely have some questions about the Securities and Exchange Commission. You may be wondering the difference between an SEC investigation and the FBI or a U.S. attorney’s investigation, or even some of the most common types of investigations and charges. We’ve answered some frequently asked questions below to help inform your decision about getting an independent attorney.

What’s the difference between an SEC investigation and other federal investigations?

The primary mission of the U.S. Securities and Exchange Commission is to enforce laws that govern financial markets to protect investors from securities fraud while preserving market fairness when buying and selling stocks, bonds, mutual funds, etc. While it does investigate possible violations of law related to accounting fraud or insider trading – as does the Federal Bureau of Investigation (FBI) and U.S. Attorney’s Office – its main focus is on violations related specifically to securities markets.

Why do I need an attorney if I’m innocent?

Even if you did not commit any violations, it is critical to have legal representation when dealing with the SEC. The SEC has extensive resources at its disposal, including the ability to subpoena records. It also has experienced investigators who understand how to conduct interviews, draft reports and make legal arguments.

Can I be charged with a crime if I am accused of violating a regulation instead of breaking the law?

Yes. While regulatory offenses do not violate criminal statutes, they can still result in filing criminal charges against you. You are at high risk if you work in a highly regulated industry like banking or investment management.