How does the SEC enforce securities fraud laws?
The U.S. Securities and Exchange Commission (SEC) is the federal agency responsible for enforcing securities fraud laws in Utah, and they do so by investigating possible violations and taking enforcement action when necessary. The SEC has an array of tools available to investigate possible fraud. The SEC will typically begin investigations by gathering information and evidence from subpoenas, surveillance, insider tips, intelligence databases, and interviews. If fraud is suspected, the SEC may seek an injunction to stop the activity, or an asset freeze to prevent the defendant from transferring assets. The SEC also has the authority to bring civil enforcement actions, which could result in return of money, fines, or the barring of individuals from future activities. The SEC may also refer cases to the U.S. Department of Justice or state authorities for criminal prosecution when appropriate. Under criminal prosecution, a defendant may face criminal charges and jail time. The SEC also works with foreign authorities to investigate and prosecute securities fraud. Finally, the SEC operates a whistleblower program that rewards people who report possible fraud. Tipsters who provide information that leads to successful enforcement action may be eligible for a financial award. Since 2011, the SEC has rewarded more than $394 million to whistleblowers for providing tips about securities fraud.
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