What is a Securities and Exchange Commission (SEC) investigation?

A Securities and Exchange Commission (SEC) investigation is a process that the SEC uses to investigate potential investment fraud in the state of California. The SEC is a federal agency that was established to protect investors and ensure fair and orderly functioning of securities markets. An SEC investigation may be initiated if the agency suspects or receives information that someone has committed a violation of federal securities laws. When a potential violation is identified, the SEC will open an investigation to collect evidence and determine the extent of any harm done to investors. During an investigation, the SEC may use a variety of tools such as subpoenas to compel people or organizations to provide documents or testimony; examine public records; or analyze trading data. Investigators may also interview witnesses, issue orders, and recommend that the SEC pursue civil proceedings or criminal actions. The SEC may ultimately choose to bring a civil enforcement action or refer the matter to the Department of Justice for criminal prosecution. In either case, the SEC will file a complaint, which will set forth the basis for the action and the alleged violations of law. Depending on the outcome of the investigation and any enforcement actions taken, the SEC may order the defendants to pay monetary penalties, disgorge any ill-gotten gains, and/or be subject to other court-imposed sanctions.

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What is a Securities and Exchange Commission (SEC) investigation?

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