Stock Lawyer SEC Enforcement and Litigation

Question 1

What are the two main types of enforcement proceedings the SEC can bring against securities law violators?

Accepted Answer

Civil injunctive actions in federal court and administrative proceedings before the SEC

Answer

Criminal prosecutions and administrative proceedings

Answer

Grand jury proceedings and civil class actions

Answer

Congressional referrals and FINRA arbitrations

Question 2

What is a 'Wells Notice' in SEC enforcement?

Accepted Answer

A formal notification from the SEC staff that they intend to recommend enforcement action and giving the recipient an opportunity to respond

Answer

A court order requiring a company to preserve evidence

Answer

A subpoena for documents in an SEC investigation

Answer

An SEC order freezing assets pending investigation

Question 3

What remedy is 'disgorgement' in SEC enforcement actions?

Accepted Answer

An equitable remedy requiring a defendant to return ill-gotten gains from securities violations

Answer

A criminal prison sentence for securities fraud

Answer

A civil fine paid to the US Treasury

Answer

An injunction barring future trading by the defendant

Question 4

Under the Dodd-Frank Act, what financial incentive does the SEC's whistleblower program offer?

Accepted Answer

Awards of 10-30% of sanctions collected when the SEC obtains more than $1 million based on original information

Answer

A flat $1 million reward for any successful enforcement action

Answer

Tax exemptions for income earned from whistleblowing

Answer

Immunity from all civil liability for information disclosed

Question 5

What is an 'Officer and Director Bar' in SEC enforcement?

Accepted Answer

An SEC remedy prohibiting a person from serving as an officer or director of a public company following a securities violation

Answer

A legal requirement that bars attorneys from representing both officers and directors simultaneously

Answer

A FINRA rule barring broker-dealers from employing convicted felons

Answer

A court order preventing executives from selling shares

Question 6

What is the purpose of the SEC's 'Whistleblower Protection Program' anti-retaliation provisions under Dodd-Frank?

Accepted Answer

To prohibit employers from retaliating against employees who report potential securities violations to the SEC

Answer

To shield the SEC's enforcement staff from lawsuits by defendants

Answer

To protect SEC witnesses from media harassment

Answer

To prevent short sellers from targeting companies that report competitors to the SEC