SEC Investigations: Common Misconceptions and Mistakes, Designing a Successful Response Strategy

Recording of a 90-minute premium CLE webinar with Q&A


Conducted on Thursday, May 21, 2020

Recorded event now available

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Program Materials

This CLE webinar will examine the SEC's investigative process and fundamental misconceptions that SEC enforcement defense counsel often have about how SEC investigations work. The webinar will provide counsel with insights into the SEC's decisionmaking process and consider the tactical tools available to steer investigations to a successful outcome. The panel will discuss the distinctions between investigative staff and the commission, the risks of being too aggressive or too slow in responding to an investigation, and what to expect as the investigation progresses to the Wells process and a charging decision.

Description

Few things are as unpleasant, expensive, and fear-inducing as an SEC investigation. Companies and individuals find themselves in a state of high anxiety over the possibility of an enforcement action and its implications. Jobs, reputations, and, in some cases, liberty are at risk. Understanding how the SEC enforcement staff thinks about its investigations and what goes on behind the scenes is crucial.

Counsel often fail to appreciate the distinction between the enforcement staff conducting an investigation and the commission as a deliberative body that will decide whether to authorize an enforcement action based on the staff's recommendation. Staying abreast of the hot button issues at the SEC is essential to anticipating how the Commission might act in a particular case. Developing insight and understanding of the SEC commissioners and their views on the commission's process and issues under the federal securities laws is critical.

Each enforcement group, specialized unit, and office in the SEC’s Enforcement Division has its own unique docket, culture, and personality. Specialized units may have developed a particular insight or expertise into the issues in the case. Understanding who is responsible for decisionmaking in the investigation is vital to assessing their willingness to compromise and how likely it is that they can be persuaded not to recommend charges in a particular case.

Common misconceptions include "letting sleeping dogs lie" (not initiating contact with the staff for fear of reawakening their interest in your case), going over the head of the line investigator to a senior supervisor in the hopes of gaining more favorable treatment, and engaging in delay tactics. Each of these issues, if not handled effectively, can cause trouble and potentially derail an otherwise successful defense.

Listen as our authoritative panel discusses the SEC investigative process and common misconceptions in responding to SEC investigations.

The subject matter of this webinar was inspired by an article authored by Mr. Hawke entitled “5 Common Misconceptions About SEC Investigations” published in Law360 on November 13, 2018

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Outline

  1. Understanding the SEC investigation process
  2. Appreciating the distinction between the staff and the Commission
  3. Who is handling the case? Understanding specialization within the Division of Enforcement
  4. “Letting sleeping dogs lie”
  5. Escalating to a senior officer
  6. Risks of delay or unresponsiveness
  7. Best practices in responding to an investigation

Benefits

The panel will discuss the SEC’s investigative process and comment upon various misconceptions about how the SEC enforcement staff truly thinks about their investigations.

Faculty

Hawke, Daniel
Daniel M. Hawke

Partner
Arnold & Porter

Mr. Hawke, a former chief of the SEC's Market Abuse Unit and Director of the SEC's Philadelphia Regional...  |  Read More

Luk, Arthur
Arthur Luk

Partner
Arnold & Porter

Mr. Luk represents corporations; directors, officers, and executives; and "Big 4" accounting firms and...  |  Read More

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