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The SEC Enforcement Division: Protecting Investors Against Fraudulent Actions
Individuals and businesses that commit securities fraud crimes, no matter how small or big, can be charged by the SEC’s law enforcement division. The people who stand accused of these crimes may include investment advisors, executives, corporations, investors, and other institutions. When contacted by the Enforcement Division, it’s recommended for individuals to seek the advice of a knowledgeable defense lawyer as quickly as possible.
The Securities and Exchange Commission (SEC) is tasked with regulating the US securities market while also investigating and prosecuting those who break securities laws. The Enforcement Division has the power to prosecute people and businesses for civil, criminal, or administrative proceedings in response to a wide range of offenses.
Regardless of whether an investigation is civil or criminal in nature, it is crucial that you defend yourself against charges levied by the SEC. The agency has been authorized to enforce a plethora of security statutes that may carry severe penalties. Heavy fines are not uncommon for violators but prison sentences are also often given out. Additionally, through public litigation releases announcing indictments against companies and investors accused of securities fraud crimes.
The SEC Enforcement Division makes an annual report detailing all its activities during that year. In 2019’s report, the SEC mentioned continuing with efforts aimed at enforcing penalties against cases related to securities fraud violations. Investigators were expected to focus on individual accountability & investors while utilizing technologies and remedies to further agency goals by continually assessing resource allocation.
Enforcement actions during fiscal year 2019 were quite extensive covering different areas as highlighted below:
| SEC Enforcement Actions in Fiscal Year 2019 | |
|---|---|
| Investment Management Cases | 110 total cases filed |
| Stand-Alone Cases Filed in Federal Court | 69 total cases filed |
| Proceedings Initiated | 862 total proceedings started |
| Individuals Charged or Named | 526 individuals accused of securities law violations |
| Obtained Judgments and Orders to Pay Penalties & Disgorgement | $4.3 billion recovered, $1.2 billion in penalties alone. |
The SEC has been working tirelessly to combat individuals and businesses that take advantage of unsuspecting investors. Fraud can manifest in different ways, but through the use of technology and resource allocation assessments, SEC has a well-documented history on fraud-related occurrences.
Cryptocurrency Fraud Investigations by the SEC
Cryptocurrency is a virtual form of currency not tied to any governmental body. It is one of the fastest-growing industries globally and equally susceptible to fraud schemes as well. The most common forms of cryptocurrency fraud include fraudulent coin offerings, investment scams linked with blockchain technology, among others. Even though cryptocurrency remains fairly new, it is still subject to existing laws governing securities.
CBD and Cannabis Investment Frauds Investigated by the SEC
Fraudsters who indulge in cannabis-related investment will also find themselves automatically guilty of other crimes like money laundering.
Mobile Trading Apps Monitoring by the SEC
Many financial applications from all sectors must comply with federal regulations before they are released for public use. A failure to follow these rules comes with penalties for intending fradusters embedded into such apps that can lead customers losing their investments.
Fraudulent Social Media Solicitations Investigated by the SEC
In recent years there has been a surge in fake social media accounts that target unsuspecting investors. The SEC outlined strict rules and regulations for marketing through emails, and social media is also not left out.
Biomedical and Technology-Based Investment Scams Under Scrutiny by the SEC
Many technology-based companies offer non-disclosed investment opportunities to investors with experimental technology as its bases. These technology companies must adhere to SEC’s rules concerning transparency, registration paperwork, sign up for exemptions as applicable.
There are many ways someone can trigger an SEC fraud investigation, some of which include:
Misrepresenting or omitting vital information when pitching investment options to prospective clients
Manipulating the prices of securities on the market
Embezzling funds or assets from customers and investors
Engaging in insider trading
Taking part in the sale of non-registered securities
It’s important you work with a qualified lawyer who will help you navigate such fraud-related allegations.
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