The moment you receive an SEC subpoena or a Wells Notice, a natural knee-jerk reaction is to search for the most prominent criminal defense firm available. It is common to look for firms that feature large rosters of former Department of Justice (DOJ) prosecutors.
While that approach makes sense for criminal investigations and already indicted cases, it may not be the right strategic choice for a civil securities regulatory inquiry, as it does not account for the unique way of how the Securities and Exchange Commission operates, investigates and prosecutes.
It is critical to understand that the SEC is a civil administrative agency, not a criminal law enforcement agency – meaning it has no criminal authority to prosecute. Its investigative procedures, standard of proof, and enforcement methods are not the same as the DOJ; in fact, in many respects they are materially different. To successfully navigate an SEC investigation and protect your professional reputation, financial assets, and employment, you need an attorney who uniquely understands the SEC and how it operates behind the scenes.
In other words, you need a former SEC Enforcement Attorney.
The Distinct Nature of Securities Defense
Firms that focus broadly on federal criminal defense often lean on their experience with the DOJ, grand jury indictments, and the federal penal code.
However, the SEC operates in a distinct, highly specific regulatory framework:
- Administrative and Civil Focus: The SEC resolves cases through civil enforcement actions and administrative proceedings. The rules of discovery, investigative testimony, and procedural mechanics are not the same as criminal prosecutions.
- The Importance of Early Resolution: In a traditional criminal case, the primary battle often takes place after charges are filed. In an SEC matter, the most critical work happens quietly in the early stages, prior to the filing of civil charges. The primary objective is to present a compelling, persuasive defense that convinces the SEC staff to decline the recommendation of enforcement charges so that a case is never filed, and headlines never made.
- Complex Trading Data and Financial Modeling: Modern SEC enforcement, particularly within specialized units like its Market Abuse Unit, relies heavily on advanced algorithmic trading data for insider trading investigations, and intricate accounting metrics for financial fraud matters. Effectively defending against this requires an attorney who is familiar with, and routinely analyzes, complex trading data, as opposed to a general criminal law practitioner who may not have such critically necessary experience.
The Tremendous Value of Focused SEC Experience
When you work with an attorney who has served inside the SEC, the approach to your defense is built on firsthand knowledge of how the agency evaluates a case, the evidence and makes decisions to either bring charges or decline to prosecute.
This rare background provides clear advantages:
- Understanding the Agency’s Regulatory Culture
The SEC is a highly structured agency with its own internal particular rules and procedures, distinct regional office cultures, and constantly evolving enforcement priorities. Working with an attorney who has spent decades focused exclusively on securities law defense—and who understands the specific approach of the SEC staff, coupled with deep experience dealing with its various regional offices—establishes immediate professional credibility and authority.
- Resolving Matters at the Civil Level to Avoid a Criminal Referral
A vital component of an effective SEC defense is managing the flow of information to prevent a civil matter from escalating. The SEC can share information with criminal authorities, or may make a referral, which may then cause a parallel criminal investigation to be initiated. An attorney with substantial SEC regulatory experience understands how to carefully manage the inquiry, including making critical strategic decisions, including whether a client testifies or asserts his Fifth Amendment Constitutional Right to remain silent, in an attempt to minimize the likelihood, or avoid, a criminal referral.
A Dedicated, Responsive, Veteran SEC Lawyer For a Fixed Flat Attorney’s Fee
When you are facing a potentially life-changing securities fraud defense investigation, you benefit most from representation that treats securities defense as a primary focus, rather than a secondary, occasional practice area.
Instead of hiring a large, multi-practice national firm where your matter may be worked up by a rotating team of younger, less experienced associates consistently generating astronomical monthly attorney’s fees, or even a smaller criminal law centric-focused boutique, hiring David R. Chase ensures your strategy is personally crafted and executed by a recognized authority in securities law. Being represented by a Chambers-ranked, veteran former SEC Senior Counsel, and Adjunct Professor of Law who teaches SEC Enforcement, gives you a dedicated, responsive and highly informed advocate personally dedicated to protecting your interests from inception of the investigation to its conclusion. Further, this representation will be based upon a flat attorney fee, so you know exactly what your representation will cost up front – no surprises.
Frequently Asked Questions (FAQs): Understanding SEC Investigations, How They Differ From DOJ Investigations and Your Defense
- What is the difference between an SEC investigation and a DOJ investigation?
An SEC investigation is civil and administrative, focused on violations of federal securities laws and seeking the return of illicit profits, civil penalties, securities industry bars and injunctions — but not jail time. A Department of Justice (DOJ) investigation is criminal, handled by federal prosecutors and law enforcement agents who can prosecute, which may result in incarceration.
- Why shouldn’t I just hire a general white-collar criminal defense lawyer for an SEC matter?
General white-collar lawyers are highly skilled in fighting criminal investigations and indictments in court and may not have the required SEC defense experience. The SEC operates under entirely different procedural rules, evidence standards, and institutional norms. Defending against an SEC prosecution requires a highly technical understanding of the federal securities laws, securities regulations, algorithmic trading data, and complex accounting standards.
- What exactly is a Wells Notice, and how does a specialized defense help?
A Wells Notice is a formal notification that the SEC staff intends to recommend enforcement action against you or your company. It is quite often your final opportunity to submit a written argument, known as a Wells Submission, explaining why charges are unwarranted. A knowledgeable securities defense attorney understands how the SEC Commissioners and Senior Staff evaluate these submissions and otherwise evaluates the merits of the potential case, thus allowing him to structure a response that deconstructs and then undercuts the SEC’s enforcement theory.
- Can the SEC freeze my personal or business assets?
Yes, the SEC can seek an asset freeze by filing an emergency action in federal district court, often through an ex parte (no prior notice given) temporary restraining order. This usually happens if the agency believes assets are being dissipated, or investor funds are at immediate risk of loss. Having an experienced SEC defense attorney engaged early with the regulatory staff can prevent this draconian, often irreparable damage from taking place.
- How does a firm with a former SEC Enforcement Attorney benefit my case?
An attorney who served within the SEC brings direct insider insight into the agency’s internal thinking, investigative techniques, and decision-making hierarchy. They know how the enforcement staff builds its cases, where their analytical blind spots lie, and how to effectively exploit them and leverage it in negotiations. This unique background, as distinct from a general former DOJ criminal lawyer, provides immediate professional credibility during complex regulatory discussions that can potentially greatly benefit the client, including avoiding being charged and fined.
Contact an SEC Inquiry Lawyer
If you are under SEC investigation or have received a SEC Subpoena or Wells Notification, call David Chase, a former SEC Senior Counsel in its Miami Regional Office, for a confidential consultation at 800- 760-0912 or email him at: david@davidchaselaw.com.
