Can the Securities and Exchange Commission Bring Criminal Charges?

SEC Investigation

When individuals or entities utilize material information not available to the public to gain an advantage in the buying or selling or stocks, options, or commodities, the Securities and Exchange Commission (SEC) can take serious action including hefty fines and sanctions. However, SEC cannot bring criminal charges by themselves.

Why? – Because the SEC is an administrative regulatory agency; not a criminal investigative agency. In so many words, it has no teeth and its bark is worse than its bite.

At least until the FBI enters the picture.

The FBI is the half-sister to the SEC in securities fraud and insider trading investigations. The two agencies commonly team up when the SEC detects fraudulent securities practices that involve criminal conduct.

Once the FBI becomes involved, the stakes are raised well past the realm of civil fines and penalties as it is common for federal felony charges to be filed.

Those charges often include:

  • Mail Fraud - Any time a document or letter is sent via US Mail (or private carrier such as UPS or FedEx) that contains a false statement to facilitate or perpetuate securities fraud, it may constitute mail fraud.
  • Wire Fraud - Anytime and email or fax is sent via telephone line or the internet that contains a false statement to facilitate or perpetuate securities fraud, it may constitute mail fraud.
  • Money Laundering - When the financial proceeds of a criminal offense is transferred, concealed, or transmitted into one or more financial institutions (among other destinations), money laundering is a favorite charge of both the FBI and federal prosecutors.

There is nothing wrong with investing and there is nothing wrong with making a lot of money doing it. The SEC, however, has sophisticated monitoring techniques that can detect irregular trading patterns that are indicative of the use unfair practices or methods. When this type of irregularity or anomaly is detected, it commonly triggers an inquiry by the SEC.

If you are being investigated for securities fraud or insider trading, now is the time to hire a Phoenix criminal defense lawyer.

If you get a knock on your door from SEC agents, it’s no joke. You don’t have to talk to them and you probably shouldn’t until you speak to a federal criminal defense attorney who has experience in handling this type of matter.

Jason Lamm is one of the only criminal defense attorneys in Phoenix who has substantial experience in defending federa lwhite collar crimes, but specifically securities fraud and insider trading cases. Cases like these are complex and detail specific. With the careful attention that you can only get from a boutique criminal defense firm, Jason Lamm has spared many clients not just from lengthy federal prison sentences, but also felony convictions that could have ended their careers and their abilities to provide for their families.

If you get that knock at your door, or if you have been charged with a federal white collar crime, call (602) 663-9100 to set up a private and confidential consultation to discuss your case and review the options that are available to give you the most effective defense possible.

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