Any time you are named as a person of interest in—or the target of—a New York securities fraud investigation, consider it cause for great concern. Even if you feel you did nothing wrong, such an investigation could lead to substantial legal and economic hardships.
The federal entity responsible for securities investigations is the Market Integrity and Major Frauds (MIMF) Unit of the U.S. Department of Justice. The unit investigates possible securities offenses like insider trading, market manipulation (spoofing) and other allegations of fraud.
How does the MIMF investigate?
It uses traditional investigative methods and computer algorithms to uncover securities violations. These algorithms allow investigators to analyze market-wide data to identify patterns indicating manipulative securities trading practices. Traditional techniques include responding to:
- Media and news stories
- Investor grievances or tips
- Reports from other investigators or agencies
With a securities investigation, you might not know what is happening until you receive a subpoena to appear for questioning. That can put you at a disadvantage in building your case.
What should you do?
Obtaining experienced legal guidance if you know or even suspect that you’re under investigation can reduce your chances of being convicted of a securities offense and possibly of even being arrested. It gives you some time to prepare before you appear for your interview with the investigating agencies.
In the meantime, avoid speaking about your situation with your business associates and on the Internet. It is also critical that you do not make any written or recorded statements. Use the period leading up to your interview to work with your legal representative on your defense.