FINRA regulates broker-dealers and conducts routine and cause-based examinations to check compliance with industry rules. Examinations may stem from complaints, disclosures, or risk signals and focus on capital adequacy, supervision, and sales practices. Brokers should understand their obligations and seek legal counsel, as FINRA’s jurisdiction and procedures can lead to serious disciplinary consequences.
Continue ReadingSEC investigations are informal or formal inquiries by the Division of Enforcement into suspected securities-law violations like insider trading, market manipulation, and unregistered offerings. Targets often learn through a subpoena seeking documents or testimony. Investigations can last months, remain nonpublic until charges, and may culminate in a Wells Notice and civil or administrative enforcement action.
Continue ReadingInsider trading is using confidential, nonpublic information to trade a company’s securities for personal advantage. Some insider transactions are legal when disclosed, but illegal trading involves material information and breached duties. The SEC monitors trading, reviews complaints, and relies on whistleblowers, while DOJ may pursue criminal charges. Penalties can include fines, prison, and officer bans.
Continue ReadingA CFTC subpoena is a demand for documents or testimony in a Commodity Exchange Act investigation. Recipients may get no warning, and noncompliance can lead to court enforcement and contempt. The CFTC’s powers are extensive and information may be shared with prosecutors. Preserve records, issue a litigation hold, consult counsel, and consider narrowing or quashing.
Continue ReadingAn SEC Wells Notice is a warning that enforcement staff may recommend charges, not a finding of guilt. The notice outlines potential violations and gives time to submit a Wells Submission. Public companies may choose whether to disclose, but registered broker-dealers and advisers must report it on Form U4. Act quickly with counsel right away.
Continue ReadingAn SEC subpoena is a legal order tied to an SEC investigation that can demand documents, data, or recorded testimony. Acting quickly matters because missed deadlines, inconsistent responses, or false statements can worsen exposure. Read the subpoena carefully, preserve records, consult experienced counsel, understand privilege, respond strategically, document communications, and avoid obstruction from the start.
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