Experienced Defense Lawyers for SEC Investigations and Enforcement Proceedings in Cupertino
As the heart of Silicon Valley, Cupertino is home to some of the United States’ – and the world’s – most important companies. It is also home to many high-profile and high-net-worth residents, including company executives and investment brokers, among others.
For these reasons, Cupertino is also a prime geographic focus area for the U.S. Securities and Exchange Commission (SEC). The SEC regularly targets local companies and individuals, initiating both investigations and enforcement proceedings on a regular basis.
Our SEC defense lawyers provide experienced representation for companies and individuals facing securities-related legal matters in Cupertino. Along with firm founder Nick Oberheiden, Ph.D. and other career defense lawyers, our defense team includes former U.S. Department of Justice (DOJ) attorneys who previously prosecuted securities fraud cases for the federal government.
Our Federal Defense Lawyers Represent Companies and Individuals in All SEC Matters
From established public companies to venture-backed technology startups, all types of companies are at risk for facing SEC scrutiny. Investment advisory and brokerage firms in Cupertino are subject to the SEC’s oversight as well. Along with these companies and firms, their owners, executives, advisors, and other personnel can also find themselves on the SEC’s enforcement radar as a result of engaging in (or appearing to engage in) various securities-related activities and transactions.
For companies, firms, and individuals facing SEC scrutiny, it is important to engage experienced defense counsel promptly. SEC investigations can target an extremely broad range of allegations, and working with counsel to identify the specific allegations at issue is a critical early step in the process of executing an effective defense. At Oberheiden P.C., we have successfully represented clients in all types of SEC investigations and enforcement proceedings, and we rely on this experience to quickly assess our clients’ risk and identify the defense strategies they have available.
Our SEC defense lawyers represent Cupertino-based companies, firms, and individuals in informal investigations, formal investigations, and enforcement proceedings involving allegations including (but not limited to):
Trading During Blackout Periods
Corporate insiders who are (or who may be) in possession of material, non-public information (NPI) are generally prohibited from trading in the leadup to significant public announcements. If corporate insiders trade during these “blackout” periods, they can potentially be at risk for allegations of securities fraud.
Even if a blackout period is not in effect, corporate insiders can still face securities fraud allegations based on front running. This involves making trades based on NPI before the information is made public.
Along with trading during blackout periods and front running, the SEC regularly investigates company executives, board members, advisors, and others for various other forms of insider trading. Any time a corporate insider has access to NPI, the insider must be very careful to avoid executing transactions that raise questions regarding possible insider trading.
Unregistered Securities Offerings
The SEC has recently bolstered its efforts to target unregistered securities offerings—largely in response to an increase in these offerings by start-up technology and digital asset companies. While there are various registration exemptions, companies must be able to demonstrate that they qualify for an exemption before making a private placement or another unregistered offering.
Unlawful IPOs and ICOs
SEC investigations and enforcement proceedings targeting initial public offerings (IPOs) and initial coin offerings (ICOs) are also on the rise. Much of the SEC’s focus in this area has centered on early-stage growth companies in Cupertino.
Under the Sarbanes-Oxley Act of 2002 (“SOX”) and other federal securities laws, publicly-traded companies are subject to varied and complex corporate accounting requirements. Violations of these requirements can lead to prosecution for companies, their owners and executives, and potentially their advisors as well.
SOX and other federal securities laws also impose significant recordkeeping obligations for publicly-traded companies. Here too, violations (even if inadvertent) can lead to heavy SEC scrutiny and substantial penalty exposure.
Public Disclosure Violations
Publicly-traded companies must make regular public filings with the SEC. The SEC has a consistent record of going after companies that not only fail to make required filings, but that omit or misrepresent material information in their public filings as well.
Investment advisors and broker-dealers in Cupertino can—and frequently do—face SEC scrutiny based on allegations of account churning and other customer-related securities law violations. Securities professionals have a legal obligation to prioritize their customers’ interests, and executing a large volume of trades in order to generate fees and commissions can be prosecuted as civil or criminal securities fraud.
Investment Advisor and Broker-Dealer Fraud
Along with account churning, investment advisors and broker-dealers in Cupertino can also face SEC investigations and enforcement proceedings for a wide range of other forms of fraud. This includes everything from misrepresenting tech startups’ business prospects to misappropriating customers’ funds.
Defending Against SEC Investigations and Enforcement Proceedings
Defending against an SEC investigation or enforcement proceeding requires a strategic, coordinated, and time-conscious approach. Generally, targets that engage in the process early will afford themselves the greatest chance at a favorable result—ideally before formal charges get filed. With this in mind, our approach to SEC defense involves:
- Conducting an Internal Investigation – As soon as possible, we seek to conduct an attorney-client privileged internal investigation so that we can gather all of the information we need to assess the validity of the allegations against our client.
- Preparing for SEC Subpoenas – The SEC has administrative subpoena power, and it relies heavily on this power when conducting formal securities fraud investigations.
- Communicating with SEC Enforcement Staff – In many cases, the most strategic approach will involve working with, rather than against, SEC enforcement staff. With that said, targeted entities and individuals must be very careful not to be overly cooperative.
- Formulating a Comprehensive and Cohesive Defense Strategy – After gathering the information we need, we formulate a comprehensive and cohesive defense strategy that addresses all pertinent allegations. Whether this involves disputing the allegations or working to secure a favorable settlement with the SEC depends on the circumstances involved.
- Steering the Matter Toward a Favorable Outcome – Regardless of the defense strategy our client ultimately chooses to pursue, we work diligently to steer the client’s matter toward a favorable outcome. This means avoiding administrative, civil, and criminal charges whenever possible.
FAQs: SEC Defense for Companies and Individuals in Cupertino, CA
Q: What Triggers an SEC Investigation?
SEC investigations can have several triggers. As companies and individuals in Cupertino are already under the microscope, these Silicon Valley residents are at high risk for facing SEC scrutiny due to triggers such as whistleblower complaints, investor allegations, public disclosure violations, and referrals from other state and federal regulatory agencies.
Q: What Penalties Can the SEC Impose Following an Investigation?
The SEC can impose a broad range of penalties through administrative and civil enforcement proceedings. Depending on the allegations involved (and the pertinent federal securities laws and regulations), potential penalties can include bars from registration or selling securities, cease-and-desist orders, other forms of injunctive relief (i.e., a prohibition on serving as the executive of a publicly-traded company), and fines.
Q: When Can SEC Investigations Lead to Criminal Charges?
SEC investigations can lead to criminal charges if agents uncover evidence of knowing, willful, or intentional securities law violations. In these cases, the SEC refers targets to the U.S. Department of Justice for prosecution in federal district court. Insider trading, selling unregistered securities, account churning, and various other violations have the potential to lead to criminal charges carrying substantial fines and the risk of federal incarceration.
Q: Does the SEC Only Investigate Securities-Related Offenses?
While the SEC’s enforcement jurisdiction is limited to securities-related matters, the SEC regularly works alongside other agencies with other law enforcement priorities. As a result, it is not uncommon for an SEC investigation to also involve allegations of tax law violations investigated by the Internal Revenue Service (IRS), consumer protection violations investigated by the Federal Trade Commission (FTC), and other crimes investigated by the DOJ and Federal Bureau of Investigation (FBI). With this in mind, when facing an SEC investigation, it is imperative not to focus solely on potential securities law violations, but to identify any other potential areas of exposure as well.
Q: When Should I Engage an Outside Law Firm for SEC Defense?
Companies, firms, and individuals in Cupertino should engage an outside law firm at the first sign of an SEC investigation. This could be a letter from the SEC, an administrative subpoena, a news report, or a tip from another entity or individual targeted in the inquiry. By the time the SEC makes an investigation known, it already has the upper hand, so at this stage it is essential that targets begin working with their counsel to build an effective defense immediately.
Contact the SEC Defense Lawyers at Oberheiden P.C.
If you or your company needs a team of experienced SEC defense lawyers in Cupertino, we encourage you to contact us promptly for more information. To speak with a senior lawyer at Oberheiden P.C. in confidence as soon as possible, please call 866-603-4540 or get in touch with us online now.