Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: February 10, 2023
The Firm
201-896-4100 info@sh-law.comHow long do SEC investigations take? First, we need to understand them. Simply stated, an SEC investigation is an inquiry by the United States Securities and Exchange Commission (SEC) to determine whether there has been a violation of federal securities laws. The SEC can investigate any person or entity it believes may have violated securities laws. It investigates various securities law violations, including insider trading, fraud, market manipulation, and accounting irregularities.
Investigations are typically initiated based on tips, referrals, and complaints received by the SEC. However, the SEC also has the authority to initiate investigations on its initiative. Once an investigation is complete, the Enforcement Division will decide whether or not to bring enforcement actions against individuals or entities that have violated securities laws.
The SEC issues a formal order of investigation when the Commission believes that there is a reasonable basis to believe that a securities law violation has occurred. Once an order is issued, the Staff of the Division of Enforcement is authorized to subpoena documents and take testimony under oath.
The Staff will report their findings to the Commission, which will then decide whether or not to bring an enforcement action. This Commission comprises five commissioners who are the main decision-making body of the institution on matters regarding investigations.
Are you wondering, “How long do SEC or DOJ investigations take?” The average SEC investigation takes between 12 and 18 months, but some can take several years. However, it may reopen an investigation if new evidence comes to light. It can also extend the statute of limitations if it believes there has been fraud or other criminal activity.
This body is not required to notify individuals or entities that they are under investigation. Often, the first indication that a person or entity has that they are under investigation is when an SEC attorney contacts them.
The statute at 28 USC 2462 provides a five-year limitations period for enforcing any action, suit, or proceeding unless otherwise provided in an act of Congress. This statute can be invoked in various situations, including civil actions brought by private individuals or by the government and all suits brought in federal court. Typically, an SEC investigation falls under this category. However, this rule has some exceptions, such as when the defendant is outside the United States or when the cause of action is based on fraud or misrepresentation.
After the SEC completes its investigation, the SEC may refer the case to the Department of Justice for criminal prosecution or bring a civil action in federal court.
The SEC has a wide range of enforcement tools at its disposal, and the action it takes depends on each case’s specific facts and circumstances. In some cases, the SEC may bring an action in federal court, while in others, it may institute an administrative proceeding against you or your business.
If the SEC decides to prosecute you based on the findings of the investigation, it will send you a Wells Notice. This notice details its intention to prosecute. You do not have to respond to the notice, but are permitted to do so.
If you have received a communication from the SEC, it is good that you get experienced securities regulatory legal counsel. The legal counsel may estimate the duration of the investigation and advise you on how to cooperate with the entity. Scarinci Hollenbeck, LLC has experienced SEC regulatory and financial crime attorneys who are familiar with the SEC investigative process and can represent you if the investigation leads to civil or criminal prosecution. Contact us today for a consultative meeting.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!