Subjects of securities and commodities enforcement actions often face high-stake, multi-front challenges that require coordinated and nuanced strategies and actions. Those facing such a precarious situation may be confronted with criminal or civil charges brought by the U.S. Department of Justice, an enforcement action by the U.S. Securities and Exchange Commission or Commodity Futures Trading Commission, and even civil lawsuits by private plaintiffs. The underlying factual conduct may be identical in any of these proceedings, but dispositions in these different actions can span from lengthy prison sentences to injunctions on corporate office-holding to disgorgement and fines.
In this article, we propose certain considerations that may assist in increasing the likelihood of a successful outcome. Before outlining these considerations, however, it is important to highlight three issues present in securities or commodities proceedings: (1) because the government has immense power supported by vast resources, subjects of investigations must be wary of falling into the highly adversarial pattern of private litigation; (2) cases against the government are not unwinnable, but even where a client is intent on rejecting a proposed resolution, a scorched-earth campaign is usually ill-advised; and (3) any interaction with DOJ, SEC, or CFTC will have some personal element, and advocates should be cognizant that there is a relationship-management aspect to that contact.
