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The U.S. Securities and Exchange Commission (SEC) has broad powers to investigate and enforce violations of U.S. securities laws. However, the vast majority of SEC enforcement actions end with negotiated consent decrees. If you are facing an SEC investigation, knowing how to negotiate can make the difference between an existential threat and a manageable resolution.
1. The SEC’s Primary Goal Is Settlement: 98% of Cases Resolve Out of Court
The SEC’s Enforcement Division files hundreds of cases annually, but over 98% settle before trial. SEC staff attorneys are evaluated on cases closed, not cases won.
2. Timing Is Everything: The First 60 Days Determine Your Fate
The most critical window for negotiation is the first 60 days after receiving a Wells Notice. Early engagement allows you to shape the SEC’s narrative and highlight mitigating factors.
3. The Wells Submission Is Your Best Opportunity
A strategic Wells Submission can limit the scope of charges, frame the narrative with exculpatory evidence, and signal cooperation.
4. The SEC’s Internal Penalty Guidelines Are Not Public
The actual penalty ranges used by Enforcement staff are internal and not public. Penalties can vary widely for similar violations depending on the quality of your defense.
5. Dodd-Frank Increased the SEC’s Leverage
The Dodd-Frank Act significantly increased the SEC’s enforcement power but also created new resource constraints, making settlement more attractive.
6. The SEC Is Not a Monolith: Know Your Audience
Negotiations occur on three levels: Staff Attorney, Branch Chief, and Associate Director or Director of Enforcement. Most settlements are negotiated at the staff attorney or branch chief level.
7. SEC Settlements Typically Include Three Components
- Injunctive Relief: Court orders prohibiting future violations
- Disgorgement: Return of ill-gotten gains plus prejudgment interest
- Civil Penalties: Fines often calculated as a multiple of ill-gotten gains
8. Most Settlements Include “Neither Admit Nor Deny” Language
This allows the defendant to avoid an admission of liability while paying penalties. However, since 2022, the SEC requires admissions in certain cases involving egregious misconduct.
How to Leverage These Insights
- Engage Early and Often: Shape the narrative and explore settlement options immediately.
- Build a Strong Defense: Gather documents and evidence to support your position.
- Be Transparent and Cooperative: Demonstrating cooperation can lead to significant penalty reductions.
- Hire Experienced Counsel: SEC investigations are complex and require experienced securities counsel.
Reduction in pretrial jail population since NJ bail reform implementation.
Source: NJ Judiciary Annual ReportApproval rate for properly filed expungement petitions in NJ.
Source: NJ Courts Statistical ReportCommon Mistakes to Avoid
Actually Stay Silent
Most people know they have the right to remain silent but still talk to police. Anything you say can and will be used against you. Politely decline to answer questions until your attorney is present.
Bail Conditions Are Enforceable
Violating bail conditions, even minor ones, can result in immediate re-arrest and make it much harder to obtain bail again. Follow every condition to the letter.
Proven Track Record
Recent Case Results
*Results may vary depending on your particular facts and legal circumstances.
SEE ALL CASE RESULTSWhat Our Clients Say
"Facing an SEC investigation was terrifying. The Spodek team negotiated a resolution that preserved my career and my reputation. Their knowledge of securities law is unmatched."— David A., SEC Defense Client MORE REVIEWS
Lead Attorney & Founder
Todd Spodek
Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience to every case.
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Frequently Asked Questions
New Jersey reformed its bail system in 2017. Instead of a cash-based system, judges now use a Public Safety Assessment (PSA) to determine whether a defendant should be released pretrial. Most defendants are released with conditions, while those deemed high-risk may be detained. An experienced attorney can argue for favorable release conditions at your detention hearing.
No. You have the constitutional right to remain silent and to have an attorney present during questioning. Anything you say to police can be used against you in court. Politely invoke your rights by saying "I want to speak with my attorney before answering any questions." This cannot be held against you.
Attorney fees vary based on the complexity of the case, the charges involved, and whether the case goes to trial. At Spodek Law Group, we offer transparent pricing and flexible payment plans. We provide a free initial consultation to discuss your case and give you an honest assessment of costs. Investing in quality representation often saves far more in the long run than choosing the cheapest option.
An arraignment is your first court appearance after being charged with a crime. The judge will read the charges against you, and you'll enter a plea (usually not guilty at this stage). The judge will also set bail or release conditions. Having an attorney at your arraignment is critical, as they can advocate for favorable bail terms and begin building your defense strategy from day one.
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