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At times, publicly traded companies and corporations can find themselves the focus of a government inquiry or investigation. These inquiries may come from securities regulatory enforcement agencies such as the Securities and Exchange Commission (SEC), Commodities Futures Trading Commission (CFTC) and the Financial Industry Regulatory Authority (FINRA).

The inquiries and investigations can center around any number of issues, including:

  • Insider trading
  • FCPA compliance
  • Market timing and late trading
  • Hedge fund market manipulation
  • Portfolio valuations
  • Internal controls
  • Compliance with the Investment Advisers Act of 1940
  • Merger and acquisition due diligence

For many companies, it makes good sense to retain an experienced securities regulatory law firm who can conduct regular internal audits, identifying issues before they become legal problems. One of the main advantages of hiring a law firm is that many of the most successful legal firms have lawyers on staff who have actually spent time working for the SEC, CFTC and FINRA, so they can more fully understand how an investigation will unfold.

Coming out in front of a problem and resolving it as quickly as possible can save monumental financial, civil and possible criminal charges at a later date. However, when an investigation does appear to be more serious in nature, working with a law firm to devise a defense strategy is an essential part of a larger response to control any damage to officers in a company and to the company itself. Part of this plan should involve an immediate crisis management strategy by implementing the start of an ongoing dialog with regulators, shareholders, customers and the media. Minimizing damage through transparency is critical to containing a problem as early in the process as possible.

Raun Muntz O-Grady LLP serves clients in Los Angeles, Hollywood, West Los Angeles, Santa Monica, Beverly Hills, Anaheim, Orange County and communities throughout Southern California.

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