New Frontier: Best Practices in Fraud Investigations and EmergingTrends in SEC and DOJ Enforcement


Securities Docket sponsored a webinar addressing critical questions about recent changes in the economic and political climates, emerging trends in SEC and DOJ enforcement, and the potential impact on lawyers, accountants, investigators, and other consultants who perform fraud investigations. It also outlined best practices when conducting investigations for the DOJ and SEC.


  • Gary Kleinrichert, Senior Managing Director in FTI Consulting’s Forensic and Litigation Consulting Practice
  • Pravin Rao, formerly an Assistant U.S. Attorney in the Northern District of Illinois and currently a partner in the Litigation group of Perkins Coie
  • Jose A. Lopez, formerly a Senior Attorney at the United States Securities and Exchange Commission’s Division of Enforcement and currently a partner at Schopf & Weiss LLP

The webcast is available for replay. But if you want to browse, these are my notes:

Gary started the presentation by noting there is a change in regulatory focus and likely to be a new regulatory framework. He also pointed out that the SEC has become aggressive in bringing securities cases.

He noted that the hedge funds and other pooled investments will be regulated although the scope is still uncertain.

After a lengthy run through some other potential and recent regulatory changes, Gary pointed out a few things that you can do right now:

  • Be preventative
  • Review Sarbanes-Oxley, financial reporting, and securities compliance
  • Whistleblowers – Speak with lawyers to ensure internal policies are effective

Jose took over and highlighted President Obama’s impact on the SEC. Again, they are getting more aggressive. How can you survive in this hostile environment:

  • Master the SEC’s Enforcement Manual (.pdf)
  • Conduct an Effective Investigation
  • If Charges Are Filed, Aggressively Seek Information and Documents

Jose advocated requesting a Termination Notice from the SEC. The SEC’s Enforcement Manual (.pdf) provides that the Division should notify individuals and entities at the earliest opportunity when the staff has determined not to recommend an enforcement action against them to the Commission.

There was discussion about witness assurance letters, providing civil immunity for witnesses. In limited circumstances and with specific authorization of the Commission, SEC staff may provide a witness with a letter assuring him or her that the SEC does not intend to bring an enforcement action. There seems to have been little use of this procedure. In practice its use has not materialized.

Pravin focused on the Department of Justice enforcement activities. The DOJ had a focus on terrorism. He has seen a shift back to financial crimes. There is also more white collar crime legislation coming out of Washington.

he offered up two guiding principles for internal investigations:

  • “One size does not fit all“
  • “What you don’t know can hurt you”

You want to conduct an internal investigation:

  • Identify and limit harm to the company
  • Obligations under laws, regulations to self-disclose
  • Assist in criminal defense of company
  • Puts company in better light with government regulators
  • Puts company in better light with shareholders, public

He stressed the need for an developing a game plan for the investigation. You need to define the scope and decided who should be interviewed.

The materials are available on the Securities Docket website: Today’s Webcast (June 15): Materials Available Here for “A New Frontier: Best Practices in Fraud Investigations and Emerging Trends in SEC and DOJ Enforcement”

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