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Investment and Securities Fraud Defense Attorney

Federal Defense for Executives, Investors and Businesses

Arkady Bukh represents executives, investors, business owners, traders, financial professionals and companies facing investment and securities fraud investigations.

These matters may involve the Securities and Exchange Commission, the Department of Justice, federal prosecutors and other authorities responsible for financial markets. An investigation may concern investor communications, securities offerings, trading activity, corporate disclosures, the use of investment funds or allegations that material information was concealed.

Representation may begin before formal charges are filed and continue through:

  • SEC inquiries and formal investigations
  • Voluntary document requests
  • SEC subpoenas and testimony
  • Grand jury subpoenas
  • Search warrants
  • DOJ and federal prosecutor inquiries
  • Wells notices and written submissions
  • Pre-indictment negotiations
  • Indictment and arraignment
  • Pretrial motions
  • Plea negotiations
  • Federal trial
  • Sentencing
  • Asset-freeze, restitution and forfeiture proceedings

Securities cases often involve both regulatory and criminal risks. Statements or documents provided to the SEC may later become relevant to a DOJ investigation. A coordinated defense should therefore consider every pending proceeding rather than treating each request separately.

What Is Investment and Securities Fraud?

Investment and securities fraud generally involves alleged deception, a material misrepresentation or the omission of important information in connection with an investment, securities transaction or offering.

Allegations may involve:

  • False statements about the value or performance of an investment
  • Concealment of material risks or financial information
  • Misleading descriptions of how investor funds will be used
  • Promises of guaranteed or unusually high returns
  • Manipulation of securities prices or trading volume
  • Trading based on material nonpublic information
  • False corporate disclosures or accounting information
  • Unauthorized use or transfer of investment funds

A failed investment is not automatically fraud. Markets change, projections may prove inaccurate and legitimate businesses can lose money. The central issues may include what the client knew when a statement was made, whether important information was disclosed and whether the government can establish the required intent.

Who This Attorney Represents

Arkady Bukh represents clients involved in securities and investment matters, including:

  • Corporate officers and directors
  • Founders and business owners raising capital
  • Investment advisers and fund managers
  • Brokers and securities professionals
  • Investors and active traders
  • Employees with access to confidential information
  • Accountants, consultants and other financial professionals
  • Public and private companies
  • Issuers conducting securities offerings
  • Individuals accused of promoting an investment scheme
  • International clients whose transactions involve U.S. markets
  • Companies responding to SEC or DOJ requests

The role of each participant must be examined separately. A director, portfolio manager, trader, salesperson, accountant and administrative employee may have different information, responsibilities and authority.

A position within a company does not by itself prove that a person knew about or participated in securities fraud.

SEC and DOJ Investigations

A securities matter may involve an SEC investigation, a criminal investigation by the DOJ or both.

The SEC has civil enforcement authority. It may investigate possible violations, request documents and testimony, file a civil action in federal court or initiate an administrative proceeding. SEC investigations are generally conducted privately until the agency decides to bring a public enforcement action.

The DOJ, usually working through a United States Attorney’s Office or the Criminal Division, may investigate and prosecute federal crimes. Criminal securities matters may involve the FBI and other investigative agencies.

The SEC and DOJ may examine the same trading activity, offering or corporate disclosure at the same time. Although the proceedings are separate, information collected in one investigation may affect the other.

The first indication of an investigation may be:

  • A voluntary SEC document request
  • An SEC subpoena
  • A request for testimony or an interview
  • A document-preservation letter
  • A grand jury subpoena
  • Contact from federal agents
  • A search warrant
  • Questions directed to employees or business partners
  • A brokerage or bank request connected with government inquiries
  • Notice that another participant is cooperating
  • A Wells notice from the SEC staff
  • Notice of an asset freeze or account restriction

An inquiry does not necessarily mean that charges will be filed. It does mean that the client should understand the scope of the investigation before submitting records or providing testimony.

SEC Subpoenas and Document Requests

The SEC may begin by requesting the voluntary production of documents. During a formal investigation, authorized staff may issue subpoenas for records or testimony.

A request may cover:

  • Emails and text messages
  • Communications on messaging platforms
  • Documents stored on personal devices
  • Brokerage statements
  • Order tickets and trade confirmations
  • Trading blotters
  • Investor presentations
  • Private placement memoranda
  • Subscription agreements
  • Accounting records
  • Bank statements
  • Board minutes
  • Compliance policies
  • Communications with investors
  • Records of securities ownership
  • Documents concerning the use of investment proceeds

A subpoena or document request should not be ignored. Before responding, counsel may need to determine:

  • Which records are actually covered
  • Where responsive information is stored
  • Whether documents are privileged
  • Whether the request can be clarified or narrowed
  • Whether the company and individual employees have different interests
  • Whether the proposed response could affect a parallel criminal investigation
  • Whether a certification concerning the completeness of the production will be required

Documents and electronic communications must not be deleted, altered or concealed after an investigation or preservation obligation becomes known.

SEC Testimony and Government Interviews

The SEC may request voluntary testimony or compel testimony through a subpoena in a formal investigation. The DOJ or federal agents may separately request an interview.

Before providing testimony, the client should understand:

  • Whether the person is considered a witness, subject or potential defendant
  • Which transactions and communications are being examined
  • Whether the SEC and DOJ are conducting parallel investigations
  • Whether the person’s interests differ from those of the company
  • Which documents investigators already possess
  • Whether previous statements could create inconsistencies

Even a meeting described as voluntary may have serious consequences. Investigators may compare answers with trading records, emails, telephone data and testimony from other witnesses.

Preparation should include reviewing the relevant documents and identifying issues that the client does not personally know or cannot accurately remember. Guessing or attempting to provide an immediate explanation without reviewing the records may create additional problems.

Pre-Indictment Defense

Pre-indictment representation begins before a federal grand jury returns criminal charges.

At this stage, defense counsel may:

  • Contact prosecutors and clarify the client’s status
  • Identify the suspected statutes and transactions
  • Coordinate responses to SEC and DOJ requests
  • Review subpoenas and document productions
  • Prepare the client for testimony or an interview
  • Conduct an independent investigation
  • Interview relevant employees and witnesses
  • Preserve favorable records
  • Reconstruct the timeline of trades and communications
  • Retain financial or trading experts
  • Review the source and use of investment funds
  • Present factual or legal arguments to prosecutors
  • Respond to an SEC Wells notice
  • Prepare for a possible indictment or voluntary surrender

A Wells notice generally informs a person or company that SEC staff is considering recommending an enforcement action. A Wells submission may provide legal arguments, factual context and information the client believes should be considered before the Commission decides whether to authorize a case.

No attorney can guarantee that an SEC action or criminal indictment will be avoided. Early representation can, however, help prevent inconsistent statements, incomplete productions and decisions made without understanding the possible consequences.

Insider Trading Allegations

Illegal insider trading generally concerns the purchase or sale of securities on the basis of material nonpublic information in breach of a duty of trust or confidence.

Allegations may involve:

  • A corporate officer trading before an earnings announcement
  • An employee trading before a merger or acquisition
  • A professional using confidential client information
  • A person passing material nonpublic information to another trader
  • A recipient trading after receiving an unlawful tip
  • Information obtained from an employer, client, relative or business contact
  • Confidential information misappropriated from its lawful source

Insider trading allegations are not limited to corporate directors or officers. They may involve employees, consultants, advisers, relatives, friends and other people who receive information under circumstances involving a duty of confidentiality.

Relevant evidence may include:

  • The timing of trades
  • Telephone calls and messages
  • Relationships between traders and information sources
  • Account-opening records
  • Trading patterns
  • Profits or avoided losses
  • Access to confidential documents
  • Travel and location information
  • Testimony from an alleged tipper or tippee

Possible defense issues may include whether the information was material, whether it was public, whether a duty existed, whether the client knew the information had been disclosed improperly and whether the trade resulted from an independent strategy or prior plan.

A profitable or well-timed trade is not, by itself, proof of illegal insider trading.

Market Manipulation Allegations

Market manipulation allegations generally concern conduct that prosecutors or regulators claim created an artificial price, misleading trading volume or a false appearance of market demand.

Investigations may involve:

  • Pump-and-dump allegations
  • Coordinated promotional campaigns
  • Wash trading
  • Matched orders
  • Spoofing or layering
  • Undisclosed control of securities
  • Trading through related accounts
  • False statements intended to affect a security’s price
  • Transactions allegedly designed to create artificial volume
  • Manipulative short-selling allegations

In a typical pump-and-dump allegation, authorities claim that false or misleading information was used to increase demand and price before controlled shares were sold.

The defense may need to analyze:

  • Complete order and execution data
  • Market conditions at the time
  • Whether accounts were actually controlled by the same person
  • The commercial purpose of disputed transactions
  • The accuracy of public statements
  • Communications between traders
  • The liquidity and volatility of the security
  • Whether the client intended to create a false market signal
  • Whether lawful trading was misinterpreted as coordination

Market data should be examined in full. Selected trades or short message excerpts may not accurately describe an overall trading strategy.

Investment Schemes and Offering Fraud

Investment fraud investigations may concern private offerings, pooled investments, funds, real estate projects, business ventures or other opportunities promoted to investors.

The government may allege that a person:

  • Made false statements about expected returns
  • Concealed the financial condition of a company
  • Misrepresented the use of investor funds
  • Failed to disclose compensation or conflicts of interest
  • Supplied false account statements
  • Overstated available assets
  • Used new investor funds to make payments to earlier investors
  • Sold interests through unregistered or misleading offerings
  • Diverted investment proceeds to personal or unrelated expenses

Important evidence may include offering documents, pitch materials, contracts, bank records, investor communications and internal discussions about the project.

The failure of a project does not establish that it was fraudulent when created. The defense may examine whether the business was operating, whether risks were disclosed, whether funds were used for legitimate expenses and whether representations were reasonable when made.

Corporate Disclosure and Accounting Allegations

Securities investigations may also concern statements made by a public company about revenue, expenses, assets, liabilities, customers, products or future performance.

Potential evidence may include:

  • SEC filings
  • Earnings releases
  • Investor presentations
  • Internal forecasts
  • Audit records
  • Accounting workpapers
  • Communications with auditors
  • Board and committee materials
  • Sales records
  • Revenue-recognition documents
  • Internal control reports

Financial reporting can involve estimates, judgments and information collected from several departments. An incorrect figure does not automatically establish deliberate fraud.

The defense may investigate who created the information, what supporting records were available, whether the client relied on accountants or auditors and whether the disputed statement was material to investors.

Evidence Used in Securities Fraud Cases

SEC and DOJ investigations may rely on:

  • Investor emails and messages
  • Recorded calls
  • Offering documents
  • Brokerage and trading records
  • Bank and wire-transfer records
  • Telephone and location data
  • Corporate financial statements
  • Tax records
  • Audit materials
  • Board minutes
  • Compliance records
  • Search-warrant evidence
  • Testimony from employees or investors
  • Cooperating witnesses
  • Expert analysis of trades and market data

The defense should review the original records rather than relying only on summaries prepared by investigators.

A government trading chart or financial schedule represents an interpretation of the underlying data. It may omit legitimate transactions, market events, disclosed risks or communications that provide a different explanation.

Possible Defense Issues

There is no single defense that applies to every investment or securities case. Depending on the allegations, relevant issues may include the following.

No Intent to Defraud

The client may have believed that the statements were accurate and that the investment was legitimate.

Contemporaneous documents may show that projections had a reasonable basis, risks were disclosed and management was attempting to operate the business as represented.

The Statement Was Accurate or Not Material

A disputed statement may have been correct when made or may not have been important enough to influence a reasonable investment decision.

The government should not use later events as automatic proof that an earlier statement was knowingly false.

Full or Sufficient Disclosure

Offering documents, contracts or investor communications may have disclosed the relevant risks, fees, conflicts or uncertainty.

The defense should review the entire document rather than an isolated sentence.

Reliance on Accountants, Attorneys or Other Professionals

Executives and business owners may rely on accountants, auditors, lawyers, compliance personnel and financial advisers.

Such reliance does not automatically resolve a case, but it may be relevant to what the client understood and whether the client acted with fraudulent intent.

No Material Nonpublic Information

In an insider trading case, the information may already have been public, immaterial or too uncertain to qualify as material nonpublic information.

No Breach of Duty or Improper Tip

The source may not have breached a duty, or the recipient may not have known that information was disclosed improperly.

Independent Trading Decision

The trade may have resulted from research, market events, a prior investment strategy or a pre-existing instruction rather than confidential information.

No Manipulative Intent

Trading activity may have had a legitimate investment, liquidity, hedging or market-making purpose rather than an intent to create artificial price or volume.

Lack of Knowledge or Participation

An employee may have prepared documents or processed transactions without knowing that another participant allegedly made false statements.

Unreliable Cooperating Witnesses

A witness may be seeking a reduced sentence, settlement or other favorable treatment. Statements should be compared with documents, previous testimony and objective trading data.

Unlawfully Obtained Evidence

The defense may challenge evidence obtained through an unlawful search or statements taken in violation of the client’s rights.

Regulatory Issue Rather Than Criminal Fraud

A reporting, registration or compliance violation does not necessarily establish intentional criminal conduct. The defense should distinguish technical or civil issues from allegations requiring proof of fraudulent intent.

Asset Freezes, Disgorgement and Forfeiture

The SEC may seek emergency relief, including an asset freeze, when it files a civil enforcement action. It may also seek civil penalties, injunctions and disgorgement of funds alleged to represent unlawful gains.

In a criminal case, the DOJ may seek:

  • Forfeiture of alleged proceeds
  • Restitution
  • Criminal fines
  • Restraint of particular property
  • Seizure of accounts or assets connected with the charged conduct

The defense may examine ownership, the source of funds, the relationship between property and the alleged offense, third-party interests and the method used to calculate alleged gains or losses.

An account freeze or seizure does not necessarily represent a final determination that the property belongs to the government.

Possible Consequences

The possible consequences depend on the statutes charged, the client’s role, the amount involved and whether the matter is civil, administrative or criminal.

They may include:

  • Federal imprisonment
  • Criminal fines
  • Restitution
  • Asset forfeiture
  • Civil monetary penalties
  • Disgorgement
  • Injunctions
  • Officer-and-director bars
  • Restrictions on working in the securities industry
  • Suspension or loss of professional registrations
  • Supervised release
  • Civil litigation by investors
  • Immigration consequences for non-U.S. citizens

A criminal accusation, civil SEC action and administrative proceeding have different legal standards and remedies. They should not be described as if they were the same process.

How Allegations Can Affect a Business

An investigation may affect a business before any finding of liability or guilt.

Possible consequences include:

  • Extensive document-production costs
  • Interruption of business operations
  • Loss of access to records or devices
  • Investor withdrawal requests
  • Loss of financing
  • Restrictions on bank or brokerage accounts
  • Regulatory reporting obligations
  • Resignation of employees or directors
  • Related investor lawsuits
  • Loss of licenses or registrations
  • Disruption of pending transactions
  • Scrutiny of auditors, advisers and other professionals

The legal strategy should address both the investigation and the company’s ability to continue operating.

Protecting a Business During an Investigation

A company facing allegations should preserve relevant records and coordinate its response before interviewing employees or producing documents.

Appropriate steps may include:

  • Issuing a document-preservation notice
  • Identifying relevant accounts and devices
  • Reviewing internal controls
  • Determining who made the disputed statements
  • Preserving trading and communication records
  • Examining the use of investor funds
  • Identifying possible conflicts between the company and employees
  • Conducting an internal investigation under legal supervision
  • Coordinating responses to civil, regulatory and criminal authorities

An internal investigation should be planned carefully. The company must consider confidentiality, privilege, employee representation and the possibility that findings may become relevant to a government proceeding.

Bukh Law Firm Investment and Securities Fraud Defense Services

SEC and DOJ Investigation Defense

Representation during SEC inquiries, formal investigations, DOJ investigations and parallel proceedings.

Subpoena and Document-Request Response

Reviewing the scope of requests, preserving documents, identifying privileged material and organizing productions.

Pre-Indictment Representation

Communicating with prosecutors, conducting an independent investigation and presenting relevant arguments before formal criminal charges.

Wells Notice Response

Preparing a submission addressing the evidence, legal issues and reasons an SEC enforcement action should not be authorized or should be limited.

Insider Trading Defense

Representing clients accused of trading or tipping based on material nonpublic information.

Market Manipulation Defense

Defending allegations involving pump-and-dump schemes, wash trading, spoofing, coordinated trading and artificial price or volume.

Investment Scheme Defense

Representing fund managers, promoters, executives and businesses accused of misleading investors or misusing investment funds.

Financial and Trading Analysis

Working with financial, accounting and market experts to reconstruct transactions and test government conclusions.

Federal Court Representation

Representing clients during indictment, arraignment, motion practice, negotiations, trial and sentencing.

Asset-Freeze and Forfeiture Defense

Addressing frozen accounts, alleged unlawful gains, ownership interests, restitution and forfeiture claims.

What to Do After Learning About an Investigation

Do not destroy, alter or conceal potentially relevant documents, messages or trading records.

Preserve:

  • Emails and text messages
  • Communications on messaging applications
  • Personal and business devices
  • Brokerage records
  • Bank statements
  • Investor materials
  • Accounting files
  • Board documents
  • Offering materials
  • Compliance records

Before contacting investigators or producing documents, determine which agencies are involved, whether the proceeding is civil or criminal and whether the interests of the company and individual employees differ.

Arkady Bukh represents clients during SEC investigations, DOJ inquiries, subpoenas, pre-indictment proceedings, federal prosecutions and related financial proceedings.

Investment and Securities Fraud FAQ

Is Arkady Bukh a securities fraud lawyer?

Yes. Arkady Bukh represents executives, investors, financial professionals and companies facing securities fraud investigations and federal criminal proceedings.

Does the firm handle investment fraud cases?

Yes. Representation includes cases involving investment offerings, alleged misuse of investor funds, false statements, insider trading, market manipulation and related offenses.

What is the difference between an SEC investigation and a DOJ investigation?

The SEC generally conducts civil and administrative enforcement proceedings. The DOJ investigates and prosecutes federal crimes. The agencies may conduct separate but parallel investigations involving the same events.

Does an SEC investigation mean that criminal charges will be filed?

No. An SEC investigation does not automatically result in a DOJ prosecution. However, information collected during a securities investigation may become relevant to a criminal inquiry.

What should I do after receiving an SEC subpoena?

Preserve relevant records and obtain legal advice before producing documents or giving testimony. The scope, deadline, privilege issues and possible effect on other proceedings should be reviewed.

Can the SEC request documents without issuing a subpoena?

Yes. SEC staff may seek voluntary document production, and regulated entities may be required to provide certain records without a subpoena.

What is a Wells notice?

A Wells notice generally informs a person or company that SEC staff is considering recommending an enforcement action. The recipient may have an opportunity to submit legal and factual arguments before the Commission makes its decision.

Is every failed investment securities fraud?

No. An investment may lose value for legitimate commercial or market reasons. Fraud allegations generally require proof of a material deception or omission together with the mental state required by the applicable law.

Can someone who is not a company officer be accused of insider trading?

Yes. Allegations may involve employees, consultants, advisers, relatives, friends and other people accused of trading or passing information obtained through a relationship of trust or confidence.

What evidence is used in market manipulation cases?

Investigators may review trading data, account relationships, communications, promotional statements, order timing, price changes and whether disputed trades created artificial volume or price signals.

When should a defense attorney become involved?

Legal representation may be useful as soon as a person or company receives an SEC request, subpoena, interview request, preservation letter or contact from federal investigators. Waiting for an indictment may eliminate opportunities to address the allegations earlier.