Securities Fraud Defense
- Our attorneys include former government trial attorneys, former law clerks to federal judges, law professors, and dual-credentialed CPAs with deep experience in white-collar defense. Nearly one-third of our attorneys serve as law professors at tier-one law schools.
- Our white-collar attorneys have been recognized nationally and internationally, including being named to U.S. News and World Report’s Best Lawyers in America list, Super Lawyers, and recognized by Chambers & Partners as among the leading attorneys in the United States, including for fraud representations.
- Freeman’s attorneys have extensive white-collar litigation experience in complex, sophisticated federal matters.
Freeman is a go-to white-collar boutique for securities fraud investigations, prosecutions, and related litigation. Companies and executives facing sensitive securities fraud allegations turn to our white-collar defense team. Our attorneys offer big-firm talent in a collaborative environment; think-tank intellect; and exacting analytical precision. Well-versed in high-stakes litigation, our attorneys are trial-ready and battle-tested; we’re ready when you are.
The right move at the right time can mean the difference between the right outcome and the wrong one. The initial response to a white-collar legal crisis is critical. It requires an organized, strategic response, often on multiple fronts, framing the discourse and issues. Many of our most successful representations never see the light of day. But when trial is necessary, we defend our clients zealously and strategically.
Freeman is the firm that clients seek out when the stakes are high and the issues are complex.
Experience Against the Government
Our attorneys have experience navigating, and defending against, a range of government agencies, including the:
- Department of Justice (DOJ)
- Securities and Exchange Commission (SEC)
- Commodity Futures Trading Commission (CFTC)
- Financial Industry Regulatory Authority (FINRA)
- State Agencies
Freeman’s white-collar attorneys also assist corporate and individual clients with responses to government inquiries, including Department of Justice investigations, federal agency investigations, and investigations carried out by state Attorneys General.
We represent clients in civil enforcement investigations carried out by the U.S. Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and state securities regulators. We also represent clients in Public Company Accounting Oversight Board (PCAOB) proceedings, Financial Industry Regulatory Authority (FINRA) matters, and criminal investigations by the U.S. Department of Justice (DOJ). Our representation capabilities include matters involving allegations of:
- Insider trading
- Accounting fraud
- Securities offerings
- Violation of Rule 10b-5
- Special purpose acquisition companies (SPACs)
- State securities law violations
- The Dodd-Frank Act
- Whistleblower actions
- Cryptocurrency and digital assets
Federal securities-related investigations can impact public companies, audit committees, other special committees, registered investment advisers, hedge funds, private equity funds, asset managers, broker-dealers, accounting firms and lawyers, and others. We provide clients with thorough representation in government enforcement investigations.
We provide the ability to represent clients in securities fraud matters against:
- Publicly-traded companies
- Private companies
- Owners, executives, and managers
- Stockbrokers and brokerage firms
- Investment Advisors and advisory firms
Allegations of securities fraud cover a wide array of conduct, including:
- Ponzi schemes
- High-yield investment fraud
- Advances fee schemes
- Broker embezzlements
- Hedge fund fraud
We are also well-versed in other forms of alleged securities fraud often targeted by federal regulators and prosecutors include:
- Affinity fraud
- Internet fraud
- Pump-and-Dump Schemes
- Microcap stock fraud (penny stocks)
- Broker and advisor fraud
Federal and state securities laws have evolved and expanded over time and include the following statutory acts:
The Securities Exchange Act of 1934
The Securities Exchange Act of 1934 (Exchange Act) fosters transparency and fairness in secondary securities markets. The Act requires companies with securities traded on national securities exchanges and companies with large numbers of shareholders to register their securities with the SEC and abide by a variety of reporting requirements. The Exchange Act also contains an important catch-all fraud provision. Section 10(b), as implemented by SEC Rule 10b-5, makes it unlawful to, “in connection with the purchase or sale of any security,” make “any untrue statement of material fact” or to engage in fraudulent schemes
The Securities Act of 1933
The Securities Act of 1933 (Securities Act) governs the process by which companies issue securities. The Act prohibits any person from offering or selling a security to the public unless the offering has been registered with the Securities and Exchange Commission (SEC) or falls under an exemption. The Act’s exemptions include private placements, certain small issues, and offerings involving certain classes of securities (e.g., government securities and bank securities). If an exemption does not apply, an issuer must file a registration statement with the SEC that includes detailed information about the issuer’s business operations, financial condition, and the nature of the offering.
Investment Company Act of 1940
The Investment Company Act of 1940 regulates issuers that engage primarily in investing, reinvesting, and trading in securities. Common examples of investment companies are mutual funds and exchange-traded funds (ETFs).
The Investment Company Act (1) requires investment companies to register with the SEC, subject to certain exceptions, (2) imposes disclosure requirements for the investment company and its investment policies, (3) prohibits many types of direct transactions between investment companies and affiliated persons, (4) limits an investment company’s ownership of shares of other investment companies, and (5) requires investment companies to create shareholder-elected boards of directors to police management conflicts of interest.
Investment Advisors Act of 1940
The Investment Advisers Act of 1940 imposes a range of requirements on persons or firms in the business of advising others about the value of securities or the advisability of investing in securities. Under the Act and associated SEC regulations, investment advisers are fiduciaries, meaning they must act in their clients’ best interests, fully disclose any material conflicts of interest, seek best execution for client transactions, and have a reasonable basis for client recommendations. The Act also requires investment advisers to register with the SEC, subject to certain exceptions, and imposes certain disclosure obligations on registered advisers.
Private Securities Litigation Reform Act of 1995.
Congress enacted the Private Securities Litigation Reform Act of 1995 (PSLRA) to minimize frivolous securities litigation. To that end, the PSLRA imposes more stringent pleading standards in certain private securities fraud actions, requires plaintiffs in such actions to prove that a defendant’s false statement or omission caused the loss for which they seek damages, and creates a safe harbor for certain forward-looking statements by issuers, provided that they include appropriate cautionary language
Sarbanes-Oxley Act of 2002
After accounting scandals at a number of major U.S. corporations in the early 2000s, Congress enacted the Sarbanes-Oxley Act (SOX) in 2002. Under SOX and associated SEC regulations, a public company’s management must assess and report on the company’s internal controls designed to ensure accurate financial disclosures. The Act also (1) requires the CEOs and CFOs of public companies to certify that their annual and quarterly reports do not contain material false statements or omissions, (2) prohibits public companies from exercising improper influence over their auditors, (3) requires public companies to disclose certain off-balance sheet activities, (4) requires public companies to establish procedures for internal reporting of suspected abuses and complaints, and (5) protects whistleblowers from various forms of retaliatory action. Finally, the Act established the Public Company Accounting Oversight Board (PCAOB) to oversee the audits of public companies.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) effected a number of significant financial regulatory changes in response to the financial crisis of 2008. With respect to securities, DoddFrank brought security-based swap agreements under the SEC’s jurisdiction. Additionally, Title IX of Dodd-Frank, also known as the Investor Protection and Securities Reform Act of 2010, (1) established the SEC’s Office of the Investor Advocate, (2) established a whistleblower award program for reporting violations of the securities laws to the SEC, (3) enhanced regulation of credit rating agencies, (4) required the sponsors of asset-backed securities to retain some credit risk of the assets they securitize, and (5) provided for additional disclosures about and shareholder voting on executive compensation at public companies.
Texas Securities Act
The Texas Securities Act governs the regulation of the securities industry in Texas. The Act provides for the registration of securities offered or sold in Texas, and of firms and individuals who sell securities or render investment advice in the state. The Act prohibits fraud in the offer or sale of securities in Texas and in the rendering of investment advice.
Corporations and Executives
Securities fraud investigations for alleged securities fraud can have high-stakes implications for executives and corporations. Our white-collar defense practice represents clients facing threatened securities fraud enforcement, as well as clients in civil fraud litigation and administrative proceedings.
Securities fraud investigations and prosecutions can represent an existential threat. And a white-collar investigation can be a life-altering event. Whether the investigation results in an indictment or not, it can be expensive, protracted, and stressful. Our firm is accustomed to handling complex, sensitive matters; we were designed for bet-the-company proceedings.
Courtrooms are human institutions. And when parochial interests threaten the principles of justice, clients need articulate, forceful advocacy. Clients need advocates with courage and the fortitude to push through the most difficult challenges.
White-collar securities fraud investigations test savvy and strategic thinking, necessitating tactical navigation of complex factors. We work collaboratively, developing a strategic plan of attack. Recognizing that indictments in many white-collar matters can be almost as devastating as convictions, we proactively investigate the facts, develop viable defenses, and engage the government in an effort to stop prosecutions short of an indictments.
White-collar matters often involve simultaneous and parallel criminal, regulatory and civil proceedings. Freeman can navigate the complexities and collateral consequences of multiple proceedings. And when it comes to the court of public opinion, we employ ethical and strategic tactics to manage publicity.
Our attorneys at Freeman employ a proactive approach to defend and strategically position our clients. Our attorneys often initiate interaction with federal and local prosecutors, regulatory agencies, congressional investigators, and the media. The stigma of criminal accusations can impact anyone, especially professionals. Where appropriate, we seek early and rapid intervention, counteracting the impact of an investigation before it becomes public.
Our attorneys exercise sound judgment and discretion. Ultimately, our credibility is our most important attribute. We build upon it through discerning judgment and considered analysis.
Our lawyers are connected, as former government trial attorneys, former federal court law clerks, law professors at top-tier law schools, and leaders in positions of influence in public organizations. We use our firsthand knowledge of government agencies and their investigative protocols to navigate our clients through the morass, leveraging our government experience and contacts.
Experience that Counts
We have experience representing clients against a broad range of allegations and investigations.