If you receive a letter demanding information and documentation from a state securities division, I hope you find this blog before you rifle off a response. As a former Commissioner of Securities, I am frequently retained by individuals who are the subject of a state securities division investigation. Unfortunately, and far too often, the individuals hire me after they have sent in a response to the initial demand letter. Some even wait until after they have been through a recorded interrogation at the division.
A request for information is not a friendly or harmless inquiry. How you respond and the documents you provide could damn you, or at least make it very difficult to defend you once you hire us. Going through an on-the-record exam (“OTR”) is even worse. You will not be properly prepared, no matter how smart and innocent you perceive yourself to be. Moreover, the Securities Division will likely not provide the attorney you will eventually need with a transcript of the interrogation. This will leave you and your counsel at a marked disadvantage throughout the proceedings. In sum, when you get the letter, pick up the phone and hire an attorney experienced in defending state securities prosecutions. Food for thought.
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