FTC Investigations Can Present Substantial Risks. We Serve as FTC Defense Counsel for Companies and Individuals Nationwide.
If the U.S. Federal Trade Commission (FTC) is targeting you or your company, it is important to understand the risks involved. While the FTC’s enforcement authority is civil in nature, it can—and frequently does—refer matters to the U.S. Department of Justice (DOJ) for criminal prosecution. As a result, FTC investigations can present risks for criminal fines and prison time; and, in corporate investigations, both companies and their executives and board members can face charges.
With this in mind, when facing an FTC investigation, it is important to choose a defense firm that has experience handling high-stakes federal criminal matters. At The Criminal Defense Firm, we focus our practice on federal defense. Not only do we have extensive experience in the area of FTC defense, but several of our lawyers have prior experience prosecuting antitrust and consumer protection cases at the U.S. Department of Justice (DOJ) as well.
Put our highly experienced team on your side
Brian J. Kuester
Former U.S. Attorney
Former DA
Amanda Marshall
Former U.S. Attorney
Local Counsel
Joe Brown
Former U.S. Attorney
& Former District Attorney
Local Counsel
John W. Sellers
Former Senior Trial Attorney
U.S. Department of Justice
Local Counsel
Linda Julin McNamara
Former Chief, DOJ Appeals
Local Counsel
Joanne Fine DeLena
Former Assistant U.S. Attorney
Local Counsel
Aaron L. Wiley
Former Federal Prosecutor
Local Counsel
Roger Bach
Former Special Agent (OIG)
Timothy E. Allen
Former Senior Special Agent
Chris Quick
Former Special Agent (FBI & IRS-CI)
Kevin M. Sheridan
Former Special Agent (FBI)
Ray Yuen
Former Supervisory Special Agent (FBI)
What to Know When Facing an FTC Investigation
When facing an FTC investigation, there is a lot you need to know. This is true whether the FTC is targeting you personally or you have received a call, target letter, civil investigative demand (CID), or subpoena as a corporate representative. Here are some critical pieces of information about dealing with the FTC:
1. Most FTC Investigations Begin Informally
To begin, most FTC investigations are informal in nature. You may learn that the FTC is targeting your company through a phone call or letter. However, it is important not to let this informality lull you into a false sense of security. As we mentioned above, FTC investigations can present substantial risks—including the risk for criminal prosecution—and what starts as a seemingly insignificant inquiry can quickly become an extremely complex and high-risk scenario.
2. Informal Investigations Can Quickly Develop Into Full-Blown Criminal Inquiries
Typically, if FTC agents find evidence of statutory or regulatory violations through their informal investigative efforts, the next step is for the FTC to launch a formal investigation. This is significant for several reasons—including the fact that it triggers the FTC’s administrative subpoena authority.
However, informal investigations can also transition into criminal matters. While the FTC does not conduct criminal investigations directly, it has a Criminal Liaison Unit that works with the DOJ to pursue criminal charges when warranted.
3. The FTC has Numerous Investigative Tools at Its Disposal
At all stages of the investigative process, the FTC has a variety of investigative tools at its disposal. These include target letters and CIDs, among others. Like other federal agencies, the FTC is also increasingly relying on artificial intelligence (AI) and data analytics, and it regularly works alongside the DOJ, Federal Bureau of Investigation (FBI), and other agencies to gather voluminous data both from targets and from their financial institutions and other third parties.
4. FTC Investigations Have the Potential to Result in Criminal Charges
As we’ve discussed already, when facing an FTC investigation, facing federal criminal charges is also a very real possibility. Several of the laws that fall within the FTC’s enforcement jurisdiction include provisions for criminal enforcement. As a result, all FTC investigations need to be taken very seriously, and this starts with engaging experienced FTC defense counsel as early in the process as possible.
5. Executing a Successful Defense Starts with Understanding What the FTC is Investigating (and Why)
There are several steps involved in successfully fending off criminal charges during an FTC investigation. One of the earliest steps is understanding what the FTC is investigating and why. The FTC’s enforcement authority is extremely broad—covering antitrust, consumer protection, and other violations under federal statutes including (but not limited to):
- Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA)
- Children’s Online Privacy Protection Act (COPPA)
- Clayton Act
- Consumer Leasing Act (CLA)
- Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act)
- Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)
- Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA)
- Equal Credit Opportunity Act (ECOA)
- Fair and Accurate Credit Transactions Act (FACTA)
- Fair Credit Reporting Act (FCRA)
- Fair Debt Collection Practices Act (FDCPA)
- Fair Packaging and Labeling Act (FPLA)
- Federal Trade Commission Act (FTCA)
- Gramm-Leach-Bliley Act (GLBA)
- Health Information Technology (HITECH) provisions of the American Recovery and Reinvestment Act
- Truth in Lending Act (TILA)
Executing an effective defense strategy requires a clear understanding of what you need to defend against. It also requires an understanding of the investigation’s trigger. Facing an investigation triggered by a whistleblower complaint and facing a multi-agency investigation are two very different matters—each of which presents its own risks, challenges, and opportunities for success.
How We Help Companies and Individuals Avoid Criminal Charges During FTC Investigations
When engaged as FTC defense counsel, we rely on our extensive experience to help our client mount an effective defense. In a typical case, some of the key steps we will take to protect our client include:
- Intervening in the FTC’s Investigation – When facing an FTC investigation, early intervention is critical. Our attorneys work quickly to protect our clients in relation to any pending CIDs or subpoenas, discern the focus and scope of the FTC’s investigation, and begin taking control of the investigative process.
- Conducting a Privileged Risk Assessment – Once we know what the FTC is investigating, we can conduct a comprehensive risk assessment. This process, which is covered under the attorney-client privilege, involves understanding what (if anything) the FTC is going to find and identifying the defenses our client has available.
- Formulating a Targeted Defense Strategy – Based on the information we gather from the FTC and our client, we will formulate a defense strategy that is custom-tailored to the facts and allegations at hand. There are a variety of ways to handle an FTC investigation, and the most advantageous approach in any particular case depends heavily on the circumstances presented.
- Working With (Rather Than Against) the FTC – In many (but not all) cases, it will make sense to work with the FTC. If our lawyers can help FTC agents see that our client’s commercial activities are fully compliant, or if we can work with the FTC to find a mutually-agreeable resolution that avoids criminal prosecution, this can substantially reduce both the costs and the risks involved.
- Helping Our Client Make Informed Decisions – When facing an FTC investigation, making informed decisions is paramount. We work closely with our clients throughout the investigative process to ensure that they are able to make sound decisions with their (or their company’s) best interests in mind.
FAQs: Defending Against the Risk of Criminal Prosecution During an FTC Investigation
Can an FTC Investigation Lead to Criminal Charges?
An FTC investigation can lead to criminal charges. While the FTC does not prosecute criminal cases itself, it works alongside the DOJ to pursue charges when its investigations uncover evidence of malicious consumer fraud, intentional antitrust violations, and other forms of criminal misconduct.
What is the FTC Criminal Liaison Unit?
The Criminal Liaison Unit is a division of the FTC that works with the DOJ to pursue criminal charges against both companies and individuals. The Criminal Liaison Unit provides evidence to the DOJ and works with U.S. Attorneys and Assistant U.S. Attorneys to substantiate charges both during grand jury proceedings and during federal criminal trials.
When Should I Engage Defense Counsel for an FTC Investigation?
If you or your company is facing an FTC investigation, you should engage defense counsel right away. Prompt intervention can be vital for mitigating the risks involved, and involving defense counsel who can steer the investigation toward a favorable resolution can help keep the possibility of criminal prosecution off of the table.
What Criminal Penalties Can Result from an FTC Investigation?
If the FTC refers a case to the DOJ for criminal prosecution, the penalties that are at stake will depend on the specific charges the DOJ decides to pursue. Generally, however, companies targeted for criminal antitrust and consumer protection violations can face substantial fines, and individuals targeted for these offenses can face both fines and federal incarceration.
How Can Companies (and Individuals) Avoid Criminal Charges During FTC Investigations?
When facing an FTC investigation, promptly engaging experienced defense counsel provides the greatest opportunity to avoid criminal charges. Without experienced defense counsel, targeted companies and individuals can easily make costly mistakes that increase their risk of prosecution (and limit the defenses they have available). At The Criminal Defense Firm, we have extensive experience defending clients during all types of federal investigations, and we have resolved the substantial majority of our clients’ matters without charges being filed.
Speak with a Senior FTC Defense Lawyer at The Criminal Defense Firm
Are you (or is your company) facing FTC scrutiny? If so, we strongly encourage you to contact us for more information. When you do, we will arrange for you to speak with a senior FTC defense lawyer in confidence as soon as possible. To arrange a complimentary initial consultation at The Criminal Defense Firm, call 866-603-4540 or tell us how we can reach you online now.
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