TheCorporateCounsel.net

I remember – way back when – seeing the original “Wall Street” movie right when I began my legal career at the SEC. It was an era of big time insider trading busts and I was proud when the movie concluded with the SEC crashing Gordon Gekko’s offices to make the bust. Nevermind that the agency portrayed technically wasn’t the SEC – if you review the movie’s script, you will see it was “The Securities and Exchange Investigation Office” and Gordon was busted for violations of the “Security Acts.”

Since then, I have seen quite a few movies or TV shows portray the SEC in a similar vein. The latest is a recent episode of “Revenge” where the main character – Conrad Grayson – is being investigated by the SEC for some ambiguous wrongdoing (a mix of domestic terrorism and troubling trading practices). As noted in this episode recap, the two big SEC-related moments is when Conrad’s wife meets with a SEC “agent” on a park bench to spill some beans – and later when the SEC raids Conrad’s office to cart off some boxes.

Here are three myths about the SEC that were perpetuated in this TV show:

Myth #1: The SEC has criminal authority – It doesn’t, it only has civil authority. The DOJ or state attorney generals have to bring a criminal case and often work with the SEC in tandem when the circumstances warrant investigation into a possible crime.

Myth #2: The SEC can crash an office to conduct an investigation – I highly doubt the SEC shows up unannounced to carry off boxes – in fact, I’m not sure they could legally do so consistent with the Fourth Amendment because there’s no mechanism for them to seek or obtain a search warrant. It’s a much more mundane investigative process. Typically, requests are complied with by sending the Staff what they want to see – and even the depositions are conducted down at the SEC’s offices. Enforcement investigations never involve showing up unannounced, although the examiners in OCIE can do that, and sometimes do. But they do so only at regulated entities (broker-dealers, investment advisers, investment companies, etc.).

Myth #3: The SEC will meet with someone to investigate a hot tip – It would be very rare to have a “deep throat” type meeting with any witness outside of a government office building or a private lawyer’s office. For starters, the SEC doesn’t have the resources to personally meet everyone who wants to blow a whistle, even with the new Office of the Whistleblower opening up. It is possible that the Staff will meet with someone after receiving a tip and conducting a little diligence on it. But I can’t imagine any park bench meetings…

Our “Q&A Forum”: The Big 7000!

In our “Q&A Forum,” we have blown by query #7000 (although the “real” number is much higher since many of the queries have others piggy-backed on them). I know this is patting ourselves on the back, but it’s nearly ten years of sharing expert knowledge and is quite a resource. Combined with the Q&A Forums on our other sites, there have been over well over 20,000 questions answered.

You are reminded that we welcome your own input into any query you see. And remember there is no need to identify yourself if you are inclined to remain anonymous when you post a reply (or a question). And of course, remember the disclaimer that you need to conduct your own analysis and that any answers don’t contain legal advice.

Deal Cube Tournament: Round One; 13th Match

As noted in these rules (and keep sending more pics for the next tourney), please vote for two of the following four cubes below:

– Ancient Dodecahedronal Cubes (1976 & 1981)
– Pink Clear Pig
– Suitcase Nuke
– Spinning Circles

– Broc Romanek