TreatiseAnswer Book

SEC Compliance and Enforcement Answer Book (2017 Edition)

 by David M Stuart
 
 Copyright: 2017

 Product Details >> 

Product Details

  • ISBN Number: 9781402428517
  • Page Count: 800
  • Number of Volumes: 1
  •  

Written by leading former Staff of the SEC’s Division of Enforcement, SEC Compliance and Enforcement Answer Book provides essential insight into the practices and procedures of the SEC.  and provides sophisticated insight on the complex and extensive body of federal securities laws.

Leveraging the authors’ experience and expertise, the book provides nuts and bolts guidance on:

  • Conducting an effective internal investigation – while the SEC is simultaneously investigating;
  • Responding to SEC requests and subpoenas for documents, interviews, and testimony;
  • Cooperating effectively with SEC staff;
  • The Wells process, negotiating resolutions, and litigating with the SEC; and
  • The complexities that arise when criminal and international law enforcement authorities becomes involved in an SEC investigation.
SEC Compliance and Enforcement Answer Book also addresses issues on insider trading, accounting and securities fraud, market manipulation and foreign corruption, as well as special issues related to investigations of attorneys, accountants, and those identified by whistleblowers.
  Table of Contents
  Introduction
  SEC Organizational Chart
  Table of Abbreviations
Chapter 1: Internal Investigations While the SEC Is Investigating; and Appendix 1A
  • : Initial Decisions1-4
  • Q 1.1 : What are the benefits of conducting an internal investigation when the SEC is investigating?1-4
  • Q 1.2 : Who is the client in an internal investigation?1-7
  • Q 1.3 : Who at the company should be charged with overseeing the investigation?1-8
  • : Objectives of Conducting an Internal Investigation1-9
  • Q 1.4 : What are the main goals of the investigation?1-9
  • Q 1.5 : Is it necessary to document the investigation in order to build a record?1-10
  • : The Intersection of the Internal Investigation & SEC Investigation1-11
  • Q 1.6 : What impact does the internal investigation have on the SEC investigation?1-11
  • Q 1.7 : How can the company’s internal investigation allow the company to respond efficiently to the SEC investigation?1-12
  • : Ensuring Independence When Needed1-13
  • Q 1.8 : What does it mean to be “independent”? Why is it important?1-13
  • Q 1.9 : When should the company engage independent counsel to undertake the internal investigation?1-13
  • : Privilege Considerations1-14
  • Q 1.10 : Who has the privilege?1-14
  • Q 1.11 : Are employees assisting with the investigation covered under the work product doctrine or attorney-client privilege?1-15
  • Q 1.12 : Who can waive the privilege?1-16
  • Q 1.13 : Should the company waive privilege with respect to its investigative findings?1-16
  • Q 1.14 : Can the company maintain its privilege if it produces privileged materials to the SEC?1-17
  • : Employee Issues1-18
  • Q 1.15 : How does the company manage current employees in an investigation?1-18
  • Q 1.16 : How does the company manage former employees in an investigation?1-20
  • Q 1.17 : Should the company identify potentially culpable employees to government regulators?1-20
  • : Reporting the Findings1-22
  • Q 1.18 : How should investigative findings be reported?1-22
  • Q 1.19 : How should investigative findings be reported to the SEC?1-23
  • Appendix 1A : SEC Model Confidentiality AgreementApp. 1A-1
Chapter 2: Representing Individuals in SEC Testimony and Interviews; and Appendix 2A
  • : The Function of Witness Statements and Authority to Obtain Them2-2
  • Q 2.1 : What is the role of SEC testimony and interviews in SEC investigations?2-2
  • Q 2.2 : What authority does the Staff have to obtain testimony?2-3
  • Q 2.3 : What remedy does the SEC have if a witness refuses to appear in response to an investigative subpoena?2-4
  • : Protections for Witnesses and Common SEC Practices2-5
  • Q 2.4 : What warnings must the Staff provide before speaking with a witness?2-5
  • Q 2.5 : What is the SEC’s practice with respect to contacting a company employee directly even though the SEC is aware that the company is represented by counsel?2-6
  • Q 2.6 : What is the best approach for a witness to take if the Staff contacts a witness and requests a voluntary interview?2-7
  • Q 2.7 : What are the Staff’s practices with respect to interviewing witnesses by telephone?2-8
  • Q 2.8 : What are the Staff’s practices with respect to the conduct of voluntary on-the-record testimony?2-9
  • Q 2.9 : What are the Staff’s practices with respect to the use of questionnaires?2-9
  • : Testimony Preparation2-10
  • Q 2.10 : What are the goals of witness preparation?2-10
  • Q 2.11 : What can counsel learn from the Staff before testimony?2-11
  • Q 2.12 : What can counsel learn from documents before testimony?2-12
  • Q 2.13 : Are there restrictions on the Staff’s ability to share the documents and topics about which they intend to question a witness?2-13
  • Q 2.14 : What can counsel learn from other testimony?2-13
  • Q 2.15 : What should counsel learn from the witness before testimony?2-14
  • Q 2.16 : What other information should counsel learn before testimony?2-14
  • Q 2.17 : What steps are involved in preparing a witness for testimony?2-15
    • Q 2.17.1 : What should counsel advise on technique?2-15
    • Q 2.17.2 : What should counsel advise on the risk of providing false information?2-17
    • Q 2.17.3 : What criminal provisions, if any, apply to false statements that a witness makes in an interview to the Staff?2-18
    • Q 2.17.4 : What other criminal provisions, if any, apply to false statements made under oath?2-20
    • Q 2.17.5 : What should counsel do if counsel thinks that the witness has made a false statement in an SEC interview or in SEC testimony?2-21
    • Q 2.17.6 : What should counsel do to refresh recollection?2-22
  • Q 2.18 : Should company counsel be present for preparation of company employees when such employees are represented by their own counsel?2-23
  • Q 2.19 : What impact does the SEC initiative for fostering cooperation have on the witness preparation process?2-24
  • : Attendance at Testimony2-24
  • Q 2.20 : Who is allowed to attend testimony on behalf of the witness?2-24
  • Q 2.21 : Who has a right to attend testimony on behalf of the Staff?2-26
  • Q 2.22 : How many Staff members typically attend testimony?2-27
  • : Commencement of Testimony2-27
  • Q 2.23 : How does the Staff typically open the testimony?2-27
    • Q 2.23.1 : What questions are asked about representation?2-27
    • Q 2.23.2 : What instructions are given?2-28
    • Q 2.23.3 : What will the Staff say about off-the-record discussions?2-28
    • Q 2.23.4 : What will the Staff ask about documents produced?2-29
    • Q 2.23.5 : What will the Staff ask about the background questionnaire?2-29
    • Q 2.23.6 : What will the Staff ask about other witnesses?2-30
    • Q 2.23.7 : What other background questions will the Staff ask?2-30
  • : Representation by Counsel2-31
  • Q 2.24 : Under what circumstances should a witness be represented by company counsel?2-31
  • Q 2.25 : Under what circumstances should a witness be represented by separate counsel?2-31
  • : Privilege Considerations2-34
  • Q 2.26 : What privileges can a witness readily assert in testimony?2-34
  • Q 2.27 : When should a witness consider declining to testify pursuant to his privilege under the Fifth Amendment to the U.S. Constitution?2-34
  • Q 2.28 : What information will the Staff typically provide about a witness’s status prior to testimony?2-36
  • Q 2.29 : What is the role of the witness’s counsel at testimony?2-36
  • : Transcripts2-38
  • Q 2.30 : Can and should counsel obtain a transcript?2-38
  • Q 2.31 : How can SEC testimony be used in other proceedings such as civil litigation or administrative proceedings?2-38
  • Q 2.32 : What means are available for protecting the confidentiality of contents of a testimonial transcript?2-39
  • Appendix 2A : SEC Form 1662App. 2A-1
Chapter 3: Document Productions in SEC Investigations; and Appendix 3A
  • : Voluntary Document Productions3-2
  • Q 3.1 : Must you respond to a letter from the SEC requesting that you “voluntarily” produce documents or information?3-2
  • : Compulsory Document Productions3-4
  • Q 3.2 : If the SEC issues a subpoena, may you move to quash it or resist production in other ways?3-4
  • : Initial Response to Document Request3-5
  • Q 3.3 : What steps must be taken to plan for production to the SEC, whether for voluntary production or a subpoena?3-5
  • Q 3.4 : What must be done first to identify and preserve information upon receipt of a request for production from the SEC?3-6
  • Q 3.5 : What if the SEC request for documents is overly broad and unduly costly to preserve and collect?3-7
  • Q 3.6 : Are there special considerations regarding negotiations with regard to electronic data?3-10
  • Q 3.7 : Do you need to hire outside vendors to handle or assist with electronic discovery?3-11
  • Q 3.8 : How should you develop electronic search terms?3-12
  • Q 3.9 : How should you respond to a subpoena for electronic storage devices, rather than documents?3-13
  • Q 3.10 : What best practices should be followed in the information collection stage?3-14
  • Q 3.11 : What are the best practices for sorting and analyzing the collected information?3-15
  • : Cooperation in Document Productions3-16
  • Q 3.12 : How does counsel cooperate most effectively with the Staff on document production?3-16
  • : Privilege Considerations and Confidentiality in Document Productions3-17
  • : Privilege Considerations3-17
  • Q 3.13 : What steps need to be taken to protect privileged materials?3-17
    • Q 3.13.1 : When and how do you prepare a privilege log?3-18
    • Q 3.13.2 : When does the attorney-client privilege apply?3-18
    • Q 3.13.3 : When does the work product doctrine apply?3-19
    • Q 3.13.4 : What is the Staff’s position on the ability to maintain privilege over documents shared with the independent auditor?3-20
    • Q 3.13.5 : What happens if you inadvertently produce privileged information?3-20
    • Q 3.13.6 : Under what circumstances may you invoke protection from document production under the Fifth Amendment privilege?3-21
    • : Confidentiality3-23
    • Q 3.13.7 : May you decline to produce on the basis of privacy rights and confidentiality?3-23
    • Q 3.13.8 : What protections can you expect from a confidentiality agreement with the Staff?3-23
  • : Technical Aspects of Document Productions3-24
  • Q 3.14 : What should be done to protect confidential information from disclosure pursuant to FOIA?3-24
  • Q 3.15 : What are best practices to follow when producing documents to the SEC?3-27
  • : Completing Document Productions3-29
  • Q 3.16 : What are certifications of completeness?3-29
  • Appendix 3A : Sample Legal Hold NoticeApp. 3A-1
Chapter 4: Cooperating with the SEC
  • : The SEC’s Cooperation Framework4-3
  • Q 4.1 : What standards of cooperation apply to corporations and other entities in enforcement investigations?4-3
  • Q 4.2 : How has the SEC applied the Seaboard Factors in other cases?4-6
  • Q 4.3 : What standards of cooperation apply to individuals in enforcement investigations?4-8
  • Q 4.4 : What specific tools are available to individuals and entities to gain cooperation credit with the SEC?4-13
    • Q 4.4.1 : Under what circumstances should defense counsel consider using a proffer agreement?4-13
    • Q 4.4.2 : What is a cooperation agreement and under what circumstances will the SEC enter into one with an individual or entity?4-14
    • Q 4.4.3 : What are the terms of a deferred prosecution agreement and how does the SEC use such agreements?4-16
    • Q 4.4.4 : What is a non-prosecution agreement and under what circumstances will the SEC enter into one with an individual or entity?4-18
    • Q 4.4.5 : How and under what circumstances can counsel obtain immunity from criminal prosecution through the SEC?4-19
  • Q 4.5 : What other incentives exist for individuals to share information with the Staff?4-21
  • : The Mechanics of Cooperation4-22
  • Q 4.6 : When should defense counsel reach a decision regarding cooperation?4-22
  • Q 4.7 : What factors should defense counsel consider in assessing whether to self-report a violation to the Staff?4-22
  • Q 4.8 : How does the Staff typically evaluate and give credit for cooperation?4-24
  • Q 4.9 : What steps can an entity take to maximize its chances of obtaining maximum cooperation under the Seaboard Factors?4-24
  • Q 4.10 : Can counsel secure an agreement from the Staff that substantial cooperation credit will be granted before his or her client begins to share information with the Staff?4-25
  • Q 4.11 : How should privileged information be handled as part of a cooperation effort?4-26
    • Q 4.11.1 : What is the SEC’s position on waiving privilege as a condition to earning cooperation?4-27
    • Q 4.11.2 : How much protection does the SEC’s form confidentiality agreement provide for the production of privileged information?4-28
Chapter 5: Parallel Investigations with the SEC
  • : The Purpose of Parallel Investigations5-3
  • Q 5.1 : Why are parallel investigations conducted?5-3
  • Q 5.2 : Are there special considerations for when there is a parallel investigation involving the SEC and a criminal authority?5-4
  • : Obtaining Information About a Parallel Investigation5-4
  • Q 5.3 : Will the SEC inform counsel if there is a parallel investigation by another authority (such as a criminal investigation)?5-4
  • Q 5.4 : By what means can counsel determine whether parallel investigations exist?5-5
  • : Consequences of Parallel Investigations5-6
  • Q 5.5 : What are the consequences of multiple investigations related to the same subject matter?5-6
  • : Information Sharing Between Agencies Involved in Parallel Investigations5-7
  • Q 5.6 : To what extent will the agencies involved in parallel investigations cooperate with each other?5-7
  • Q 5.7 : Will the agencies coordinate their respective requests for information?5-11
  • Q 5.8 : Will the agencies coordinate their respective requests to interview witnesses or take testimony from witnesses?5-11
  • Q 5.9 : Does a criminal authority have restrictions on the type of information that it can share with the SEC?5-12
  • Q 5.10 : Will criminal authorities conduct joint proffers with the SEC Staff?5-12
  • Q 5.11 : Will the criminal authorities share the notes or FD-302s from interviews with the Staff?5-13
  • : Increasing Efficiency and Reducing Costs During Parallel Investigations5-13
  • Q 5.12 : Are there ways to conserve resources when faced with multiple document requests from different authorities?5-13
  • Q 5.13 : Are there ways to conserve resources when faced with multiple requests for witness interviews/testimony from different authorities?5-13
  • : Fifth Amendment Issues in a Parallel Investigation5-14
  • Q 5.14 : Can a client assert his Fifth Amendment privilege against self-incrimination during SEC investigations?5-14
  • Q 5.15 : Are there adverse consequences to asserting the Fifth Amendment in SEC investigations?5-15
  • Q 5.16 : Will the investigative testimony be different because a witness asserts the Fifth Amendment?5-16
  • Q 5.17 : Can a witness refuse to produce documents in response to a subpoena based on the Fifth Amendment?5-17
  • : Settlements of Parallel Investigations5-18
  • Q 5.18 : Will the SEC and other authorities involved work together in structuring a settlement?5-18
  • Q 5.19 : Will counsel need to negotiate separately with the SEC and the other authorities involved?5-18
Chapter 6: The Wells Process at the Conclusion of an SEC Investigation
  • : History of the Wells Process6-2
  • Q 6.1 : Why is it called the “Wells” process?6-2
  • Q 6.2 : What are the SEC’s policies governing the Wells process?6-3
  • Q 6.3 : Does the Enforcement Manual address the Wells process?6-5
  • : Learning of a Wells Notice6-6
  • Q 6.4 : How does the Staff deliver a Wells notice?6-6
  • Q 6.5 : What information is contained in a written Wells notice?6-6
  • : The Wells Schedule and Procedure6-8
  • Q 6.6 : How does the Dodd-Frank deadline affect the Wells process?6-8
  • Q 6.7 : When does the Staff decline to give a Wells notice?6-9
  • : Obtaining Information After the Wells Notice6-9
  • Q 6.8 : How transparent is the Staff about evidence and theories?6-9
  • : Disclosure of a Wells Notice6-10
  • Q 6.9 : Is a public company required to disclose receipt of a Wells notice?6-10
  • Q 6.10 : Are registered persons in the securities industry required to disclose receipt of a Wells notice?6-12
  • : Preparing the Wells Submission6-12
  • Q 6.11 : Can a Wells submission really impact a charging decision?6-12
  • Q 6.12 : What is the best approach to writing a Wells submission?6-13
  • Q 6.13 : Should I consider making a video Wells submission?6-14
  • Q 6.14 : Who will read the Wells submission?6-14
  • Q 6.15 : What makes a Wells submission effective?6-15
  • Q 6.16 : Should counsel ever decline to make a Wells submission?6-16
  • Q 6.17 : Are Wells submissions admissible evidence in SEC and other proceedings?6-16
  • Q 6.18 : Can the Staff reject a Wells submission?6-17
  • : Process Following a Wells Submission6-18
  • Q 6.19 : What is a Wells meeting?6-18
  • Q 6.20 : Does issuance of a Wells notice prevent the Staff from conducting further investigation?6-19
  • Q 6.21 : Can the Wells process lead to settlement negotiations?6-19
  • : The “Pre-Wells” Process6-20
  • Q 6.22 : What is a “pre-Wells” process?6-20
Chapter 7: Negotiating Settlements with the SEC
  • : Recent Developments7-2
  • Q 7.1 : What recent developments have impacted the negotiation of settlements?7-2
  • : Settlement Process7-4
  • Q 7.2 : What is the process by which the Staff obtains approval to settle a matter?7-4
  • Q 7.3 : What are some of the differences between entities and individuals in considering settlement?7-5
  • Q 7.4 : How does the Cooperation Initiative change the settlement landscape for entities?7-6
  • Q 7.5 : How does the Cooperation Initiative address individuals?7-7
  • Q 7.6 : How has judicial scrutiny of settlement terms affected settlements?7-8
    • Q 7.6.1 : What is the role of the court in approving consent judgments?7-8
  • Q 7.7 : How does the increased use of the administrative process affect settlements?7-12
    • Q 7.7.1 : What is the process for settling an administrative action?7-13
    • Q 7.7.2 : If the Staff indicates that it is recommending that the enforcement action be filed administratively rather than in federal district court, should the respondent give greater consideration to settling?7-15
    • Q 7.7.3 : What are the impacts of factual findings in administrative settlements?7-16
  • Q 7.8 : With the SEC’s focus on individuals, what considerations need to be made when considering a settlement?7-16
  • Q 7.9 : When does the SEC require a defendant or respondent to admit wrongdoing?7-17
  • : Settlement Strategy and Tactics7-18
  • Q 7.10 : When is the best time to start settlement negotiations?7-18
    • Q 7.10.1 : Should an attempt be made to preempt a Wells notice by initiating settlement discussions prior to receiving a Wells notice?7-19
    • Q 7.10.2 : What happens if settlement discussions begin during the Wells process?7-19
    • Q 7.10.3 : Settlement after an enforcement action is filed?7-20
  • Q 7.11 : What areas should be covered during settlement negotiations?7-20
    • Q 7.11.1 : Discussion of the facts?7-20
    • Q 7.11.2 : Discussion of legal precedent?7-21
    • Q 7.11.3 : Discussion of policy?7-21
  • Q 7.12 : What are the potential charges?7-22
  • Q 7.13 : What are the potential sanctions?7-22
    • Q 7.13.1 : What are the factors surrounding penalties?7-22
    • Q 7.13.2 : What are the factors affecting negotiation of disgorgement?7-23
    • Q 7.13.3 : What should be considered in negotiating remedial undertakings?7-24
    • Q 7.13.4 : What is a monitorship and is it negotiable?7-24
  • Q 7.14 : What are the collateral consequences of settling and how can one mitigate the impact of such consequences?7-24
    • Q 7.14.1 : What are the criminal collateral consequences, if any, of admitting liability?7-26
    • Q 7.14.2 : Will the settled final judgment and consent be admissible in related proceedings?7-26
  • Q 7.15 : What is a settling party permitted to say about the SEC’s allegations after settling on a neither-admit-nor-deny basis?7-28
Chapter 8: Remedies and Sanctions in SEC Enforcement Actions
  • : Remedies and Sanctions in General8-3
  • Q 8.1 : What laws and rules give the SEC authority to impose remedies and sanctions?8-3
  • Q 8.2 : What kinds of monetary remedies and sanctions can the SEC impose or obtain?8-5
  • Q 8.3 : What kinds of non-monetary remedies and sanctions can the SEC obtain from individuals?8-9
  • Q 8.4 : What kinds of non-monetary remedies and sanctions can the SEC impose on corporations, audit firms and regulated entities?8-10
  • : Injunctions, Cease-and-Desist Orders, and Emergency Relief8-12
  • Q 8.5 : What is the standard for imposing a permanent injunction?8-12
  • Q 8.6 : What is the scope of a permanent injunction?8-13
  • Q 8.7 : What is the effect of a permanent injunction?8-14
  • Q 8.8 : When can the SEC obtain a temporary restraining order and preliminary injunction?8-15
  • Q 8.9 : What is the difference between a cease-and-desist order and a permanent injunction?8-16
  • : Disgorgement and Prejudgment Interest8-16
  • Q 8.10 : How is disgorgement calculated?8-16
  • Q 8.11 : When is prejudgment interest imposed and how is it calculated?8-18
  • : Penalties8-20
  • Q 8.12 : When are penalties imposed in cases not involving insider trading?8-20
  • Q 8.13 : How is the amount of a penalty determined?8-21
  • Q 8.14 : How is the amount of an insider trading penalty determined?8-23
  • : Bars and Suspensions of Individuals8-24
  • Q 8.15 : What is the standard for an officer and director bar?8-24
  • Q 8.16 : What is the standard for barring or suspending a person from associating with a registered broker-dealer or investment adviser?8-25
  • Q 8.17 : What is the standard for barring or suspending a person from practicing or appearing before the Commission?8-26
  • : 21(a) Reports8-27
  • Q 8.18 : Why does the SEC issue a report of some investigations, but not others?8-27
  • : Statutes of Limitations8-27
  • Q 8.19 : Is the SEC limited by any statutes of limitations in its enforcement actions seeking equitable or monetary relief?8-27
Chapter 9: SEC-Imposed Monitors
  • : Overview9-2
  • Q 9.1 : What is a monitor?9-2
  • Q 9.2 : What other agencies can impose monitors?9-3
  • Q 9.3 : When does the SEC impose monitors?9-3
    • : Compliance, Remediation, and Self-Monitoring Programs9-4
    • Q 9.3.1 : How does the SEC assess “pre-existing” compliance programs?9-4
    • Q 9.3.2 : What are the attributes of an effective remediation program?9-5
    • Q 9.3.3 : How do companies use “self-monitoring” to avoid an SEC-imposed monitor?9-7
  • : Scope and Authority9-8
  • Q 9.4 : What is the scope and authority of an SEC-imposed monitor?9-8
  • : Selection of Monitors9-9
  • Q 9.5 : How are SEC-imposed monitors selected?9-9
  • : Independence Requirements9-11
  • Q 9.6 : What are the independence requirements of SEC-imposed monitors?9-11
  • : Monitor Retention Agreement9-12
  • Q 9.7 : What are the key terms of a company-monitor retention agreement?9-12
  • : Monitor Obligations9-12
  • Q 9.8 : What are the monitor’s obligations?9-12
    • Q 9.8.1 : Must the monitor issue a work plan?9-14
    • Q 9.8.2 : How does the monitor conduct the evaluation?9-14
    • Q 9.8.3 : Can the monitor rely upon the company’s resources or work product conducted by or on behalf of the company?9-15
    • Q 9.8.4 : Will the monitor re-investigate the misconduct leading to the appointment?9-15
    • Q 9.8.5 : What are the monitor’s obligations regarding undisclosed or new misconduct?9-16
  • : Company Obligations9-17
  • Q 9.9 : What are the company’s obligations?9-17
    • Q 9.9.1 : Must the company provide privileged information?9-17
    • Q 9.9.2 : Is the company required to implement the monitor’s recommendations?9-18
  • : Monitor Reports9-19
  • Q 9.10 : What is a monitor required to report?9-19
  • Q 9.11 : Is the monitor’s report confidential?9-20
  • : Duration of Monitorship9-21
  • Q 9.12 : How long does the monitor serve?9-21
  • Q 9.13 : Under what circumstances can the government extend or early terminate a monitorship?9-21
Chapter 10: Disclosure Issues in SEC Enforcement Actions and Investigations
  • : Disclosure by the SEC10-2
  • Q 10.1 : Will the SEC disclose the existence of an investigation?10-2
  • Q 10.2 : Even if the SEC does not disclose the existence of an investigation, are there other ways in which the investigation may become public or disclosed to others?10-3
  • : Disclosure by Public Companies10-4
  • Q 10.3 : When is a public company required to disclose a government investigation in a public filing?10-4
  • Q 10.4 : For public companies, what statutory and regulatory authority should be considered in evaluating whether a disclosure is necessary in a registration statement or periodic report?10-6
  • Q 10.5 : For public companies, what rules govern whether a disclosure is required before the next periodic filing?10-9
  • Q 10.6 : What if a company determines that there are no events requiring disclosure, but wishes, nonetheless, to speak about the investigation?10-11
  • Q 10.7 : What factors should be considered in determining whether the investigation is material?10-12
  • Q 10.8 : Are there any special disclosure requirements when doing a private placement?10-13
  • Q 10.9 : What disclosure obligations are imposed by the securities exchanges in their listing requirements?10-14
  • Q 10.10 : Are there circumstances when a public company may be required to disclose issues related to an SEC investigation in its financial statements?10-15
  • Q 10.11 : When a public company is considering disclosure, what is the significance of the fact that an investigation is “informal”?10-16
  • Q 10.12 : What is the significance of the fact that an investigation is “formal”?10-16
  • Q 10.13 : Are public companies required to disclose a Wells notice?10-16
  • Q 10.14 : Even if there is no requirement to disclose an investigation, are there strategic reasons for doing so?10-18
  • Q 10.15 : What considerations should be made regarding the content of the disclosure?10-18
  • Q 10.16 : Should disclosure of an investigation be pre-cleared with the Enforcement Staff?10-19
  • Q 10.17 : What are the potential adverse consequences of a disclosure?10-20
  • Q 10.18 : How should a company prepare for the potential adverse consequences of a disclosure?10-21
  • Q 10.19 : What are the potential adverse consequences of not disclosing an investigation?10-21
  • Q 10.20 : How should a public company respond to press or analyst inquiries once an investigation is disclosed?10-22
  • Q 10.21 : What special considerations are there for foreign private issuers?10-23
  • : Disclosure by Regulated Entities10-23
  • Q 10.22 : Are there special disclosure requirements for regulated entities?10-23
  • : Disclosure by Individuals10-24
  • Q 10.23 : What disclosure requirements exist for individuals?10-24
    • Q 10.23.1 : … for accountants?10-24
    • Q 10.23.2 : … for attorneys?10-25
    • Q 10.23.3 : … for financial professionals?10-26
    • Q 10.23.4 : … for officers and directors of public companies?10-26
  • : Enforcement of Non-Disclosure10-27
  • Q 10.24 : Has the SEC brought enforcement actions based on a failure to disclose adequately an investigation?10-27
Chapter 11: Multinational Aspects of SEC Investigations; and Appendix 10A
  • : Methods of Conducting Multinational Investigations11-2
  • Q 11.1 : What is the SEC’s subpoena power in multinational investigations, at home and abroad?11-2
  • Q 11.2 : How do regulatory agencies typically gather evidence when conducting multinational investigations?11-3
  • Q 11.3 : What other types of international agreements assist regulatory agencies in gathering evidence in multinational investigations?11-4
  • Q 11.4 : How can a regulatory agency obtain evidence in the absence of a treaty?11-4
  • : Privilege Considerations When Conducting Cross-Border Investigations11-5
  • Q 11.5 : What protection do privileged communications receive in cross-border investigations?11-5
  • Q 11.6 : Would a U.S. court apply U.S. privilege law to a communication that involves an attorney admitted or located in a foreign jurisdiction?11-6
  • Q 11.7 : Would courts in the E.U. apply the attorney-client privilege to communications between a U.S. attorney and a client in the E.U.?11-8
  • Q 11.8 : Would a U.S. court consider the privilege waived for documents produced in response to a request from the European Commission or from some other foreign enforcement agency?11-10
  • : Document Production/Data Privacy Considerations11-11
  • Q 11.9 : What is data privacy and why is it important when undertaking cross-border investigations?11-11
  • Q 11.10 : Does the United States have a data privacy law?11-11
  • Q 11.11 : What kind of liability can an individual face for violating Regulation S-P?11-12
  • Q 11.12 : What liability do parties face in connection with violations of data privacy regulations of foreign jurisdictions?11-13
  • Q 11.13 : Do other foreign laws affect the collection and use of information besides those relating to the protection of PII?11-20
  • Q 11.14 : How does one typically comply with conflicting obligations to produce documents to the SEC and the data protection laws in foreign jurisdictions?11-21
  • Q 11.15 : Does the United States defer to foreign blocking statutes?11-21
  • : Global Coordination11-22
  • Q 11.16 : How have international investigations changed in the wake of the financial crisis?11-22
  • Q 11.17 : What particular challenges do practitioners face in light of the increased international cooperation amongst regulators?11-24
  • Q 11.18 : What areas outside of securities regulation have experienced a rise in international cooperation between regulators?11-26
  • Q 11.19 : What problems could develop as the SEC and other regulators seek to extend their enforcement of U.S. securities laws outside the borders of the United States?11-27
  • Appendix 11A : Current Signatories of the IOSCO MOUApp. 11A-1
Chapter 12: Foreign Corrupt Practices Act Investigations
  • : Scope of the FCPA12-2
  • Q 12.1 : Briefly, what does the FCPA do?12-2
  • Q 12.2 : What conduct do the anti-bribery provisions cover?12-3
    • Q 12.2.1 : What is an “issuer” and how do the anti-bribery provisions apply to issuers?12-3
    • Q 12.2.2 : What is a “domestic concern” and how do the anti-bribery provisions apply to domestic concerns?12-4
    • Q 12.2.3 : How do the anti-bribery provisions apply to U.S. citizens?12-4
    • Q 12.2.4 : How do the anti-bribery provisions apply to foreign non-residents?12-5
    • Q 12.2.5 : How do the anti-bribery provisions apply to officers, directors, employees, agents, and stockholders?12-5
  • Q 12.3 : What conduct do the accounting provisions cover?12-5
    • Q 12.3.1 : How do the accounting provisions apply to companies?12-6
    • Q 12.3.2 : How do the accounting provisions apply to individuals?12-6
  • : Jurisdiction of the FCPA and Related Statutes12-7
  • Q 12.4 : Are there limits to the FCPA’s jurisdiction?12-7
  • Q 12.5 : How do the SEC and DOJ seek to apply the law’s jurisdiction to cover commercial bribery or government entities?12-8
    • Q 12.5.1 : How has the Travel Act been used?12-8
    • Q 12.5.2 : How have the FCPA’s accounting provisions been used?12-9
    • Q 12.5.3 : How do regulators handle payments made to foreign government entities but not to individual officials?12-9
  • Q 12.6 : What other laws does corruption implicate?12-10
    • Q 12.6.1 : How do mail and wire fraud laws relate to the FCPA?12-10
    • Q 12.6.2 : How are conspiracy charges used in anti-bribery enforcement?12-11
    • Q 12.6.3 : What do anti–money laundering laws cover, and how do they relate to the FCPA?12-11
    • Q 12.6.4 : How do the antifraud provisions of the Exchange Act relate to the FCPA?12-12
  • : FCPA Exceptions and Defenses12-13
  • Q 12.7 : What are exceptions and defenses to the FCPA’s prohibitions?12-13
    • Q 12.7.1 : Are facilitation payments permissible under the FCPA?12-13
    • Q 12.7.2 : Is paying certain “reasonable and bona fide” travel expenses of a foreign official a violation of the FCPA?12-14
    • Q 12.7.3 : Are payments made pursuant to a contract with a foreign government or agency a violation of the FCPA?12-16
    • Q 12.7.4 : Are all gifts and entertainment of foreign officials prohibited by the FCPA?12-17
    • Q 12.7.5 : Are payments made to a foreign official as a result of extortion or duress prohibited by the FCPA?12-18
    • Q 12.7.6 : Can acts that are lawful under local law violate the FCPA?12-18
  • : FCPA Internal Investigations12-19
  • Q 12.8 : Should an investigation be conducted at all?12-19
  • Q 12.9 : Is it important to understand “local law” issues?12-20
  • Q 12.10 : Beyond the initial allegations, how far should a company investigate FCPA allegations?12-21
  • Q 12.11 : What constitutes “anything of value”?12-22
  • Q 12.12 : What satisfies the business purpose test?12-23
    • Q 12.12.1 : How does one determine who is a “foreign official”?12-24
    • Q 12.12.2 : How do U.S. enforcement agencies define “instrumentality” of a foreign government?12-24
    • Q 12.12.3 : How have courts defined “instrumentality” of a foreign government?12-25
    • Q 12.12.4 : How does the Esquenazi opinion affect decisions about scoping FCPA investigations?12-27
  • Q 12.13 : How does the government obtain evidence in the United States in FCPA investigations?12-28
    • Q 12.13.1 : When and why do companies make voluntary disclosures?12-29
    • Q 12.13.2 : How does the government use informal requests and subpoenas to gather information about potential FCPA violations?12-35
  • Q 12.14 : How does the government obtain evidence outside of the United States in FCPA investigations?12-35
    • Q 12.14.1 : How does the government use MLATs?12-36
    • Q 12.14.2 : How does the government use MOUs?12-36
    • Q 12.14.3 : How does the government use letters rogatory?12-39
    • Q 12.14.4 : How does the government use ad hoc agreements?12-40
    • Q 12.14.5 : How does the government use voluntary disclosure or cooperation?12-40
  • Q 12.15 : What does the government typically expect of companies during an FCPA investigation?12-40
  • Q 12.16 : Are there specialized resources that are useful in FCPA cases?12-44
Chapter 13: Insider Trading Investigations
  • : Elements of Insider Trading13-2
  • Q 13.1 : What are the key elements of insider trading?13-2
    • Q 13.1.1 : What is “material” information?13-3
    • Q 13.1.2 : What is “non-public” information?13-3
    • Q 13.1.3 : What is a “breach of a duty of trust or confidence”?13-3
  • : Application to Corporate “Outsiders”13-4
  • Q 13.2 : Under what circumstances may corporate outsiders be charged for insider trading?13-4
    • Q 13.2.1 : What is the “misappropriation” theory?13-4
    • Q 13.2.2 : What is a “tippee” and how can liability be imposed on tippees?13-5
  • : Tender Offers13-6
  • Q 13.3 : How can liability be imposed in the context of a tender offer?13-6
  • : SEC Investigation Technique and Tools13-6
  • Q 13.4 : How does the SEC investigate insider trading cases?13-6
    • Q 13.4.1 : How is surveillance conducted by exchanges, broker-dealers, FINRA, and the SEC?13-6
    • Q 13.4.2 : What SEC units are involved in insider trading investigations?13-7
  • : Potential Defendants13-8
  • Q 13.5 : Who may be charged for insider trading?13-8
    • Q 13.5.1 : What is the agency theory of liability?13-8
    • Q 13.5.2 : How does liability attach to control persons, relief defendants, and supervisors?13-8
  • : Defenses13-9
  • Q 13.6 : What are defenses to insider trading liability?13-9
  • : Sanctions and Remedies13-13
  • Q 13.7 : What remedies can the SEC seek in insider trading cases?13-13
    • Q 13.7.1 : What factors do courts consider in determining whether to impose an O&D bar?13-14
  • : Compliance Programs13-14
  • Q 13.8 : Why should firms have an insider trading compliance program?13-14
    • Q 13.8.1 : What are recommended elements of an insider trading compliance program?13-15
  • : Recent Developments13-16
  • Q 13.9 : What lessons have we learned from the major insider trading cases that have been brought since October 2009?13-16
    • Q 13.9.1 : How has prosecution of parallel civil and criminal enforcement actions changed?13-17
    • Q 13.9.2 : What new tools are being used to investigate and prosecute insider trading?13-17
    • Q 13.9.3 : How effective is “lack of materiality” as a defense in insider trading cases?13-19
    • Q 13.9.4 : Do insider trading laws apply to information obtained from expert networks and other researcher providers?13-19
  • Q 13.10 : What have been some effects of the SEC’s cooperation with foreign regulators in prosecuting insider trading cases?13-21
Chapter 14: Financial Reporting and Accounting Fraud Investigations
  • : Detection of Accounting Fraud14-2
  • Q 14.1 : How does the SEC detect accounting fraud?14-2
  • : Types of Accounting Cases14-3
  • : Revenue Recognition14-3
  • Q 14.2 : What issues have formed the basis for improper revenue recognition cases?14-3
    • Q 14.2.1 : How do side agreements result in improper revenue recognition?14-4
    • Q 14.2.2 : What revenue recognition issues have arisen with multiple element and software contracts?14-4
    • Q 14.2.3 : What revenue recognition issues have arisen in leasing arrangements?14-4
    • Q 14.2.4 : What revenue recognition issues have arisen in “bill-and-hold” or “ship-and-store” transactions?14-5
    • Q 14.2.5 : What is “channel stuffing”?14-5
    • Q 14.2.6 : How else is revenue accelerated?14-6
  • : Reserves14-6
  • Q 14.3 : What is reserve manipulation?14-6
  • : Expense Recognition14-6
  • Q 14.4 : What is improper expense recognition?14-6
  • : Off–Balance Sheet Transactions14-7
  • Q 14.5 : What are improper off–balance sheet transactions?14-7
  • : Fair Value Reporting14-7
  • Q 14.6 : What is improper fair value reporting?14-7
  • : Other Issues14-7
  • Q 14.7 : What other accounting issues have arisen in enforcement cases?14-7
    • Q 14.7.1 : What accounting and financial reporting issues have arisen in enforcement cases specific to the mortgage crisis?14-9
  • : Securities Laws Violations in Accounting Cases14-9
  • Q 14.8 : Which provisions of the federal securities laws typically are at issue in accounting and financial reporting cases?14-9
    • Q 14.8.1 : Which provisions of the federal securities laws impose antifraud liability?14-10
    • Q 14.8.2 : Which provisions of the federal securities laws impose liability for reporting violations?14-11
    • Q 14.8.3 : Which provisions of the federal securities laws impose liability for internal controls violations?14-11
    • Q 14.8.4 : Which provisions of the federal securities laws impose liability for books and records violations?14-12
    • Q 14.8.5 : Which provisions of the federal securities laws impose liability for misleading the independent auditor?14-12
    • Q 14.8.6 : Which provisions of the federal securities laws impose liability for false certifications?14-13
  • : Materiality Analysis14-13
  • Q 14.9 : What is the importance of a materiality analysis in accounting fraud matters?14-13
  • : Individual Liability14-15
  • Q 14.10 : On which individuals does the SEC usually focus in accounting fraud investigations?14-15
  • : Investigative Process14-16
  • Q 14.11 : In a financial reporting or accounting investigation, what types of requests should the company expect?14-16
  • Q 14.12 : What role does a company’s audit committee have in accounting fraud investigations?14-16
  • Q 14.13 : When does the retention of accounting experts make the most sense?14-17
  • : Sanctions and Remedies14-18
  • Q 14.14 : What sanctions might the SEC seek in a financial reporting or accounting fraud case?14-18
  • : Defenses14-19
  • Q 14.15 : What arguments are available to defeat liability in a financial reporting or accounting fraud case?14-19
    • Q 14.15.1 : What defensive theories have been advanced by entities?14-19
    • Q 14.15.2 : What defensive theories have been advanced by individuals?14-20
Chapter 15: Market Manipulation Investigations
  • : Relevant Statutory Provisions15-2
  • Q 15.1 : Which provisions of the federal securities laws govern illegal market manipulation?15-2
    • Q 15.1.1 : What is prohibited under section 9 of the Exchange Act?15-2
    • Q 15.1.2 : What is prohibited by section 10(b) of the Exchange Act and Rule 10b-5?15-4
    • Q 15.1.3 : What is prohibited by section 17(a) of the Securities Act?15-5
    • Q 15.1.4 : What is prohibited by section 5 of the Securities Act?15-5
  • : Manipulative Trading Authority15-6
  • Q 15.2 : What types of trading activity does the SEC routinely charge as illegal market manipulation?15-6
    • Q 15.2.1 : What are “wash sales” and “matched orders”?15-6
    • Q 15.2.2 : What is “spoofing” or “layering”?15-8
    • Q 15.2.3 : What is a “pump and dump”?15-9
    • Q 15.2.4 : What is “marking the close”?15-11
    • Q 15.2.5 : What are “touting” and “scalping”?15-12
    • Q 15.2.6 : What is “parking”?15-13
  • : Investigative Technique and Tools15-13
  • Q 15.3 : How does the SEC investigate market manipulation schemes?15-13
    • Q 15.3.1 : What is the SEC’s national exam program?15-13
    • Q 15.3.2 : What is the significance of FINRA referrals?15-14
    • Q 15.3.3 : What are bluesheets?15-15
    • Q 15.3.4 : What function do stock transfer records serve?15-16
    • Q 15.3.5 : How are bank and brokerage records affected by Privacy Act restrictions?15-17
    • Q 15.3.6 : How are witness interviews and testimony beneficial to SEC investigation procedures?15-17
  • : Open-Market Manipulation15-17
  • Q 15.4 : What is illegal “open-market” manipulation?15-17
    • Q 15.4.1 : What have the courts held to be illegal open-market manipulation?15-18
    • Q 15.4.2 : What is the holding in Markowski v. SEC and why is it important?15-19
    • Q 15.4.3 : What is the holding in GFL v. Colkitt and why is it important?15-20
  • : Defenses to Open-Market Manipulation Allegations15-22
  • Q 15.5 : What Wells defenses are available in an open-market manipulation investigation?15-22
    • Q 15.5.1 : Can the absence of false statements be a Wells defense?15-22
    • Q 15.5.2 : Can full disclosures about the trading activity be a Wells defense?15-24
    • Q 15.5.3 : Can use of a legitimate trading strategy be a Wells defense?15-24
    • Q 15.5.4 : Can a business motive be a Wells defense?15-25
Chapter 16: Offering Fraud Investigations
  • : Relevant Statutory Provisions16-3
  • Q chap16_16.1 : What laws and regulations impose liability for offering fraud?16-3
  • Q chap16_16.2 : What does section 5 of the Securities Act require?16-3
  • Q chap16_16.3 : Why is section 17(a) considered a broad-based enforcement tool in offering fraud cases?16-4
  • : Offering Fraud Activity16-5
  • Q chap16_16.4 : What are some examples of classic offering fraud cases?16-5
  • : Ponzi Schemes16-6
  • : Boiler Rooms16-7
  • : Pump and Dump Schemes16-8
  • Q chap16_16.5 : When are charges brought for registration statement violations?16-9
  • Q chap16_16.6 : Will the Commission authorize offering fraud cases where the conduct is considered only negligent?16-11
  • Q chap16_16.7 : What other kinds of offering fraud cases has the Commission recently authorized?16-13
  • Q chap16_16.8 : Have there been any offering fraud cases related to crowdfunding?16-14
  • Q chap16_16.9 : What does the SEC consider a material misrepresentation or omission in offering fraud?16-15
  • Q 16.10 : What is “gun jumping”?16-16
  • : Individual Liability16-17
  • Q 16.11 : Who does the SEC hold liable for offering fraud?16-17
    • Q chap16_16.11.1 : Can board members be charged with offering fraud?16-18
    • Q chap16_16.11.2 : Have broker-dealers been charged with offering fraud?16-19
  • : Document Requests in Offering Fraud Investigations16-20
  • Q 16.12 : What kinds of documents will the SEC seek in an offering fraud investigation?16-20
  • : Sanctions and Remedies16-21
  • Q 16.13 : What remedies are available to the SEC in offering fraud cases?16-21
  • Q 16.14 : How does the SEC calculate monetary sanctions in offering fraud cases?16-24
  • Q 16.15 : What are the collateral consequences of settling an SEC Enforcement action based on offering fraud?16-24
  • : Impact on Private Litigation16-25
  • Q 16.16 : How will an SEC offering fraud settlement affect private litigation?16-25
Chapter 17: Investigations and Inspections of Regulated Entities
  • : Relevant Statutory and Regulatory Provisions17-2
  • Q 17.1 : What special regulatory requirements apply to regulated entities?17-2
    • Q 17.1.1 : … to broker-dealers?17-3
    • Q 17.1.2 : … to investment advisers?17-4
    • Q 17.1.3 : … to investment companies?17-4
  • Q 17.2 : What are the supervisory and compliance obligations of regulated entities?17-5
    • Q 17.2.1 : What is the duty to supervise?17-5
    • Q 17.2.2 : Who is a supervisor?17-6
    • Q 17.2.3 : What conduct constitutes a failure to supervise?17-9
    • Q 17.2.4 : What constitutes failure to respond to “red flags”?17-9
    • Q 17.2.5 : What constitutes a failure to investigate and to respond?17-10
    • Q 17.2.6 : How can one establish the adequate supervision defense?17-11
    • Q 17.2.7 : What must a firm do to prevent misuse of material non-public information?17-15
    • Q 17.2.8 : What are some theories of secondary liability other than failure to supervise?17-16
    • Q 17.2.9 : What are aiding, abetting, and causing violations?17-16
    • Q 17.2.10 : What is control person liability?17-17
  • Q 17.3 : What obligations are imposed by the compliance rules?17-18
    • Q 17.3.1 : What compliance obligations are imposed relating to personal trading by supervised persons?17-20
    • Q 17.3.2 : What is the overlap of the duty to supervise and the compliance rules?17-21
    • Q 17.3.3 : Is there a duty to investigate and respond to possible misconduct?17-21
  • : Investigative Tools and Techniques17-23
  • : SEC Inspections17-23
  • Q 17.4 : How do SEC enforcement investigations of regulated entities begin?17-23
    • Q 17.4.1 : From where does the SEC derive its power to inspect regulated entities?17-23
    • Q 17.4.2 : Are there any limitations on the SEC’s inspection powers?17-25
    • Q 17.4.3 : What are the organization and goals of the SEC’s inspection program?17-28
    • Q 17.4.4 : How does the SEC target inspections of regulated entities?17-30
    • Q 17.4.5 : How does the SEC conduct inspections of regulated entities?17-32
    • Q 17.4.6 : What are the possible outcomes of SEC examinations?17-35
  • : FINRA Inspections17-36
  • Q 17.5 : How does FINRA conduct inspections?17-36
  • : Conduct During an Inspection17-37
  • Q 17.6 : What are best practices to follow during an inspection?17-37
  • Q 17.7 : How should a regulated entity respond to a regulatory crisis?17-41
  • : Sanctions and Remedies17-45
  • Q 17.8 : What special remedies are available against regulated entities?17-45
    • Q 17.8.1 : How can relief from bars be obtained?17-47
    • Q 17.8.2 : What are statutory disqualifications?17-48
    • Q 17.8.3 : What is the disqualification from acting as a solicitor for an adviser?17-50
    • Q 17.8.4 : What disqualifications apply to “bad actors” in private placements?17-50
    • Q 17.8.5 : What disqualifications are triggered by injunctions under section 9(a) under the Investment Company Act?17-52
  • : Disclosure Obligations17-52
  • Q 17.9 : What special disclosure obligations apply to regulated entities?17-52
  • : Parallel Investigations17-53
  • Q 17.10 : What rules govern parallel SEC and other investigations?17-53
    • Q 17.10.1 : What special challenges arise from parallel FINRA and SEC investigations?17-53
    • Q 17.10.2 : What special issues arise from parallel state investigations?17-54
    • Q 17.10.3 : What special issues arise from CFA Institute inquiries?17-54
    • Q 17.10.4 : What does the CFA Institute do to monitor candidate and member behavior?17-55
    • Q 17.10.5 : What does the CFA Institute do to investigate allegations?17-55
    • Q 17.10.6 : How does the CFA Institute conduct disciplinary proceedings?17-55
    • Q 17.10.7 : How does the CFA Institute implement disciplinary sanctions when needed?17-56
Chapter 18: Special Issues in Investigations of Accountants
  • : Principal Liability Concerns for Accountants18-3
  • Q 18.1 : What are the common types of violations investigated by the SEC involving accountants?18-3
    • Q 18.1.1 : How may an accountant be held liable for securities fraud violations?18-3
    • Q 18.1.2 : How may an accountant be held liable for SEC reporting, books-and-records, and internal-controls violations?18-5
    • Q 18.1.3 : What Sarbanes-Oxley certifications are accountants responsible for?18-6
    • Q 18.1.4 : What auditor independence standards are accountants subject to?18-7
    • Q 18.1.5 : What must accountants do to comply with Exchange Act section 10A?18-10
  • Q 18.2 : What types of sanctions and remedies does the SEC typically seek against accountants?18-12
  • : SEC Rule 102(e)18-13
  • Q 18.3 : What is SEC Rule 102(e)?18-13
  • Q 18.4 : What is “improper professional conduct” by an accountant under Rule 102(e)?18-15
  • Q 18.5 : What does it mean for an accountant to “appear and practice before the Commission” under Rule 102(e)?18-16
  • Q 18.6 : How and by whom are Rule 102(e) proceedings initiated?18-17
  • Q 18.7 : What are the procedural rules and the due process afforded in a Rule 102(e) proceeding?18-18
  • Q 18.8 : Under what circumstances will the SEC charge an accounting firm for the conduct of its individual partners or employees?18-18
  • Q 18.9 : What are some special collateral consequences for an accountant that could result from an SEC investigation or enforcement action?18-19
  • : The PCAOB18-20
  • Q 18.10 : What is the PCAOB?18-20
  • Q 18.11 : What jurisdiction and power does the PCAOB have over accountants?18-20
  • : Record Retention and SEC and PCAOB Investigative Access to Audit Documentation18-22
  • Q 18.12 : To what extent can the SEC and PCAOB obtain access to the workpapers of auditors and their foreign affiliates?18-22
Chapter 19: Special Issues in Investigations of Attorneys
  • : SEC Regulations Concerning Attorney Conduct19-3
  • Q 19.1 : What standards of professional conduct govern lawyers representing corporate clients before the SEC?19-3
    • Q 19.1.1 : What is an “appropriate response by the CEO or CLO”?19-4
    • Q 19.1.2 : Are attorneys required to report suspected violations outside the company?19-5
  • Q 19.2 : What standards apply to lawyers representing parties in SEC investigations?19-6
  • : Rule 102(e) Proceedings Against Attorneys19-9
  • Q 19.3 : Under what circumstances may an attorney be suspended or barred from practicing before the SEC?19-9
    • Q 19.3.1 : When will the SEC institute a stand-alone Rule 102(e)(1) proceeding for improper conduct by an attorney?19-9
    • Q 19.3.2 : What standards does the SEC employ in suspending or barring an attorney based on a permanent injunction or a finding of securities laws violations?19-10
    • Q 19.3.3 : Can an attorney disqualified under Rule 102(e) be reinstated?19-12
  • Q 19.4 : When will the SEC bring enforcement actions against attorneys for securities law violations?19-12
    • Q 19.4.1 : What attorney conduct will result in a finding of participation in market manipulation schemes?19-13
    • Q 19.4.2 : When will an attorney representing a corporation run afoul of the rules and invite an SEC investigation?19-14
    • Q 19.4.3 : What conduct constitutes insider trading based on client information?19-15
    • Q 19.4.4 : What special challenges do counsel for regulated entities face?19-16
  • : Privilege Issues in SEC Investigations of Attorneys19-18
  • Q 19.5 : Can attorneys refuse to submit evidence protected by attorney-client privilege?19-18
    • Q 19.5.1 : Can an attorney offer exculpatory evidence to the SEC if that information is protected by attorney-client privilege?19-18
Chapter 20: Special Issues Relating to Whistleblowers
  • : Whistleblower Statutes20-3
  • Q 20.1 : What statutory schemes address whistleblowers in the context of SEC investigations?20-3
  • : Sarbanes-Oxley20-4
  • Q 20.2 : Who qualifies as a whistleblower under Sarbanes-Oxley?20-4
  • Q 20.3 : What qualifies as “protected” whistleblowing?20-7
  • Q 20.4 : What protections are afforded to a whistleblower under Sarbanes-Oxley?20-7
  • Q 20.5 : How does a whistleblower pursue retaliation claims under Sarbanes-Oxley?20-8
  • : Dodd-Frank Act20-10
  • Q 20.6 : Who qualifies as a whistleblower under the Dodd-Frank Act?20-10
  • Q 20.7 : How does a whistleblower file a report with the SEC?20-11
  • Q 20.8 : May a whistleblower remain anonymous under the Dodd-Frank Act? If so, for how long?20-12
  • Q 20.9 : What provisions of the Dodd-Frank Act encourage employees to report internally before reporting to the SEC?20-13
  • Q 20.10 : Who qualifies for protection under the Dodd-Frank Act’s whistleblower provisions?20-14
  • Q 20.11 : Can a non-U.S. whistleblower qualify for protection under the Dodd-Frank Act’s whistleblower provisions?20-17
  • Q 20.12 : What claims may a protected whistleblower pursue under the Dodd-Frank Act for adverse actions taken against the whistleblower?20-17
  • Q 20.13 : What are the differences between the protections afforded whistleblowers under the Sarbanes-Oxley Act and the Dodd-Frank Act?20-20
  • Q 20.14 : Are mandatory arbitration clauses in employment contracts enforceable?20-20
  • Q 20.15 : Are confidentiality and nondisparagement clauses enforceable?20-22
  • Q 20.16 : What claims may the SEC pursue under Dodd-Frank against employers who take adverse action against a whistleblower?20-25
  • Q 20.17 : What types of tips has the SEC received under the Dodd-Frank whistleblower program?20-25
  • Q 20.18 : What monetary awards may whistleblowers obtain under the Dodd-Frank Act?20-25
  • Q 20.19 : What are the requirements under the Dodd-Frank Act for a whistleblower to be eligible for an “award”?20-30
  • : Policy Issues20-31
  • Q 20.20 : What factors does the Commission consider in determining the amount of whistleblower awards?20-31
  • Q 20.21 : Does the SEC staff communicate directly with whistleblowers who are current employees?20-32
  • Q 20.22 : How does the SEC staff handle corporate documents provided by a whistleblower? In particular, what steps does the SEC staff take to ensure that it does not receive documents protected by the attorney-client privilege?20-33
  • Q 20.23 : Does the fact that the SEC’s investigation began as a result of a whistleblower or otherwise benefited from information provided by a whistleblower affect the traditional Seaboard cooperation credit analysis?20-33
  • : Best Practices20-35
  • Q 20.24 : What are some “best practices” for handling reports of possible violations made by employees?20-35
Chapter 21: Litigating with the SEC
  • : Forum Selection by the SEC21-2
  • Q 21.1 : What forums are available to the SEC?21-2
  • Q 21.2 : What factors into the selection of a forum?21-2
  • Q 21.3 : Will the SEC shift toward more administrative proceedings?21-4
  • : Enforcement Actions in Federal Court21-5
  • Q 21.4 : Is a defendant entitled to a jury trial in federal court actions?21-5
  • Q 21.5 : What remedies can the SEC pursue in federal court actions?21-6
  • Q 21.6 : Are there statutes of limitations that apply to federal court actions?21-8
  • Q 21.7 : What are the key litigation considerations in making a Wells submission?21-9
  • Q 21.8 : What are strategies for getting discovery from the SEC?21-10
  • Q 21.9 : How are dispositive motions used in federal court actions?21-13
  • Q 21.10 : How are experts used in federal court actions?21-15
  • Q 21.11 : What types of motions in limine are common in federal court actions?21-16
  • Q 21.12 : What are the consequences of a parallel criminal proceeding?21-18
  • Q 21.13 : How do SEC enforcement actions differ from private lawsuits?21-20
  • : SEC Administrative Proceedings21-22
  • Q 21.14 : What rules are applied in administrative proceedings?21-22
  • Q 21.15 : How does an administrative proceeding differ from a federal court action?21-22
  • Q 21.16 : What remedies can the SEC pursue in administrative proceedings?21-24
  • Q 21.17 : What can be expected in administrative proceedings?21-27
  • Q 21.18 : What is the process for challenging administrative orders?21-29
  Index

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