Regulatory Enforcement Defense

Our team includes lawyers who have held senior positions at the U.S. Securities and Exchange Commission (SEC), including a former Associate Director, Deputy Chief Litigation Counsel, three former branch chiefs, and a former Senior Counsel in the SEC's Enforcement division.

We counsel and defend individuals and entities in connection with inquiries, investigations, and civil and criminal enforcement actions initiated by various government regulatory agencies and self-regulatory organizations. We defend clients before the SEC, the Public Company Accounting Oversight Board, the Financial Industry Regulatory Authority, and other federal and state securities and financial regulators. Our lawyers have represented clients in regulatory enforcement matters involving potential violations of both U.S. and E.U. statutes or regulations conducted individually, and/or jointly, by the SEC, U.S. Department of Justice, and non-U.S. financial regulators. We are well versed in the language, regulations, rules, policies, and processes of these organizations and offer clients the experience, insights, and judgment needed to secure successful outcomes.

Our lawyers have been retained by corporations, boards of directors, and board committees to conduct internal investigations and reviews. We have also been retained by non-profit and public-sector entities requiring investigative assistance and guidance. We have conducted internal investigations covering a variety of topics, including financial fraud, recordkeeping and regulatory compliance. Our lawyers demonstrate sensitivity and discretion regarding the issues that may be encountered during internal investigations, such as confidentiality concerns, personnel privacy, and attorney-client privilege.

Our lawyers have represented corporations and individuals under investigation for, charged with, or suspected of criminal law violations, or who may be witnesses in connection with such alleged criminal violations. Our lawyers have experience defending both domestic and international criminal investigations. We have represented clients before the Department of Justice, offices of state attorneys general, and local district attorney offices.

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Looking Forward

We see aggressive enforcement ahead. In recent remarks, new SEC Chair Gary Gensler invoked New Deal-era predecessors and promised “hard,” “novel,” and “high-impact” cases, while specifically rejecting criticism that this is “regulation by enforcement.” Despite decades of SEC no-admit settlements, he announced that his SEC “may seek admissions in certain cases where heightened accountability and acceptance of responsibility are in the public interest.” He reported instructing staff to move matters quickly and “cut back on meetings” with defense counsel, and cautioned SEC targets against “going right up to the edge of a rule or searching for some ambiguity in the text.”

More generally, Gensler has expressed strong interest in a variety of substantive areas, including payment for order flow, ESG disclosure, and crypto trading. These appear poised to become hot enforcement zones. Gensler has also credited the SEC staff whistleblower program, which has paid over $1 billion to tipsters over recent years, for its role in helping source cases. With Gensler’s new leadership team now settling in, we will likely see his new initiatives and approaches executed quickly.

The SEC’s FY 2021 numbers reflect steady production despite staff working from home and taking testimony by videoconference, with new enforcement cases rising to 434 from 405 the year before, delinquent filing matters fairly steady at 120 down from 130, and “follow-on” suspensions dipping to 143 from 180. However court rulings and legislative developments created uncertainty over SEC remedies, with disgorgement dropping to $2.4 billion from $3.6 billion in FY 2020, while penalties rose to $1.4 billion from $1.1 billion. Case mix tilted heavily toward securities offerings (33%), investment advisers and investment companies (28%), and issuer reporting and audit-accounting (12%), compared with single-digit showings by broker-dealer (8%), insider trading (6%), and market manipulation (6%).