Investigation Exposure: Proposed Law Could Give SEC Greater Access to Information
Legislation promotes information sharing between criminal and civil investigations.
February 28, 2010 at 07:00 PM
2 minute read
Companies simultaneously undergoing civil and criminal investigations will have one more thing to worry about if the Investor Protection Act, which the House passed in December 2009, becomes law.
Under the potential legislation, information obtained during a Department of Justice (DOJ) grand jury investigation may be shared with the Securities and Exchange Commission (SEC), a departure from the secrecy previously granted to DOJ grand jury investigations. Though many companies investigated for securities fraud face scrutiny from both agencies, this rule would more closely intertwine the civil and criminal inquiries.
This poses a challenge for in-house attorneys trying to protect their company's brand in the face of agency scrutiny, says Nicolas Morgan, a partner at DLA Piper.
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