You should hire a criminal defense lawyer as soon as you receive a subpoena, target letter, Securities and Exchange Commission (SEC) inquiry, or contact from federal investigators—or believe that you are under investigation. The SEC pursues civil enforcement; it cannot bring criminal charges. However, the Department of Justice (DOJ) may pursue a separate criminal prosecution for the same conduct under SEC investigation if it also violates federal criminal law. Civil enforcement actions do not result in imprisonment, but can carry significant consequences, including substantial financial penalties, court orders restricting future conduct, or bars from serving as an officer or director of a public company.
What Is a Subpoena?
A subpoena is used to compel information during an investigation and may require you to produce financial records, trading histories, electronic communications, and other documents, or provide sworn testimony. Being served an SEC subpoena indicates that investigators are seeking evidence relevant to a potential securities law violation in which you may be viewed as a witness, third party, or target.
Can an SEC Subpoena Lead to Criminal Charges?
The SEC cannot bring criminal charges, but an SEC investigation can uncover evidence that the alleged conduct may violate federal criminal law, potentially leading the DOJ to file criminal charges.
For example, securities fraud, insider trading, or fraudulent investment schemes may lead to criminal prosecution. The same conduct may also give rise to wire fraud charges if the evidence establishes the elements of the offense, including the use of interstate wire communications to further an alleged scheme to defraud.
DOJ and SEC investigations may proceed simultaneously, and agencies may share evidence and information, meaning statements and records provided during an SEC investigation may also become relevant to a criminal case. The SEC may also refer suspected criminal conduct to the DOJ.
Before responding to an SEC subpoena, hire a federal criminal defense lawyer to review the subpoena’s scope and deadlines, determine what you are legally required to produce, challenge requests that exceed those requirements, and ensure you do not disclose more information than necessary. An experienced securities and crypto fraud lawyer can assess the potential exposure, help you protect your rights, and advise you on how to respond without unnecessarily increasing your legal exposure or raising the risk of parallel proceedings.
When Can Crypto Fraud Overlap With an SEC Violation?
Cryptocurrency fraud may fall within the jurisdiction of the SEC when the alleged misconduct involves a security and violates federal securities laws. Whether a digital asset qualifies as a security depends on the relevant facts and applicable law, not simply whether the asset uses blockchain technology.
Allegations may be that a company or promoter misrepresented an investment’s value, concealed financial risks, misused investor funds, or manipulated trading activity. The SEC may examine token offering materials, white papers, marketing statements, investor agreements, exchange records, and communications between founders and investors to assess how an investment was presented and whether investors were misled.
What to Do If You Receive an SEC Subpoena, DOJ Target Letter, or Contact From Federal Agents
- Do not speak with agents, investigators, or prosecutors before consulting a criminal defense lawyer. Do not assume that the matter can be handled informally or without legal guidance. Even conversations described as routine or informal may become part of the government’s investigation and may later be used as evidence.
- Hire a criminal defense attorney as soon as possible. Your attorney will evaluate the government’s allegations, communicate with investigators when appropriate, and develop a defense strategy before prosecutors make charging decisions.
- Do not alter, delete, or destroy financial records, tax documents, emails, or electronic communications. Preserve all potentially relevant information. Destroying or changing information after receiving a subpoena carries severe legal consequences.
- Do not discuss the investigation with investors, coworkers, business partners, employees, potential witnesses, or other parties. Statements made to others may later become relevant during the investigation.
Proven Federal Defense in SEC & Crypto Fraud Investigations
Tarras Defense represents individuals, executives, business owners, investors, and professionals facing SEC investigations, securities fraud allegations, and federal criminal charges involving cryptocurrency and digital assets. Founded by nationally recognized trial lawyer David Tarras in Boca Raton, Florida, our firm focuses on strategic federal defense from the earliest stages of an investigation, including matters that may involve overlapping SEC enforcement proceedings and DOJ criminal investigations.
-
- $100 Million Crypto Fraud – Bond Secured for Foreign National: In an alleged $100 million cryptocurrency Ponzi scheme, obtained bond for a foreign national with no U.S. ties—an exceptionally rare outcome.
- $57 Million FOREX Investigation – No Charges Filed: In a $57 million foreign-exchange investment fraud investigation, Tarras Defense convinced federal prosecutors and SEC criminal investigators to decline prosecution, resolving the matter without criminal charges.
- $8 Million Ponzi Scheme – Guidelines Slashed: In a multimillion-dollar alleged Ponzi scheme, successful objections reduced the guideline range by seven years compared to the government’s calculation and recommendation.
If you are a founder, investor, promoter, trader, executive, or company owner under investigation for securities fraud, crypto fraud, wire fraud, or related financial offenses, consult an experienced securities fraud and crypto fraud lawyer immediately.
Call: 954-592-9416
Email: David@TarrasDefense.com
Frequently Asked Questions: Securities & Crypto Fraud Investigations
What Is Securities Fraud?
Federal securities fraud generally involves allegations that someone intentionally misled investors, concealed material information, manipulated financial activity, or engaged in deceptive conduct connected to investments or securities transactions.
What Are Common Allegations in Crypto Fraud Investigations?
Crypto fraud investigations may involve allegations of misleading investors, misrepresenting a token offering, concealing financial risks, or misusing investor funds through cryptocurrency platforms, digital assets, or decentralized finance projects.
Can an SEC Investigation Lead to Federal Criminal Charges?
Yes. SEC proceedings are not criminal, but if the same alleged conduct violates federal securities laws, the DOJ may pursue criminal charges. An SEC subpoena does not automatically establish wrongdoing. Early legal intervention can help protect your rights during the SEC investigation and prepare a defense strategy for the possibility of a separate DOJ criminal prosecution, particularly in cases involving digital assets or investor fraud.
