If the SEC or CFTC is investigating your company, the decisions made in the first weeks matter more than almost anything that follows

The SEC investigation process moves through stages: informal inquiry, formal order of investigation, document subpoena, investigative testimony, Wells notice, and either settlement or litigation. At each stage there are strategic decisions to make and interests to protect. The earlier counsel is involved, the more the factual record and enforcement theory can be shaped.

Document production must be managed carefully — privilege review, responsiveness determinations, and production format all have consequences that carry through the entire proceeding. Testimony preparation is critical: clients who testify poorly at the investigative stage create evidentiary problems that are difficult to undo.

• Responding to informal inquiries and voluntary document requests before a formal order is issued

• Advising on whether and how to cooperate with staff at each stage of the process

• Document production management — privilege review, responsiveness determinations, production format

• Investigative testimony preparation — what staff is looking for, where the traps are, how to testify accurately and strategically

• Managing parallel regulatory inquiries across SEC, CFTC, DOJ, and FinCEN when multiple agencies are involved

A Wells notice is formal notification that SEC staff intends to recommend enforcement action. A Wells submission — a legal brief arguing why enforcement is not warranted — is high-stakes advocacy directed at the Commission itself. The arguments must address law, facts, equities, and often the policy implications of bringing enforcement action in a rapidly evolving regulatory area.

A well-crafted Wells submission can result in a narrowed charge, a settlement on more favorable terms, or no action at all. Understanding what arguments actually move Commission staff — as opposed to what looks good in a brief — requires knowledge of how the Commission makes these decisions from the inside.

• Analyzing the enforcement theory staff has built and identifying its weakest points

• Drafting the Wells submission — legal argument, factual record, equitable considerations

• Advising on the policy arguments most likely to resonate with the specific Division and Commission

• Managing the timing and tone of the submission relative to any parallel settlement discussions

Most enforcement matters resolve through negotiated settlement. Consent decrees, disgorgement orders, civil penalties, and undertakings regarding future conduct are all negotiable within limits — but only if counsel understands the institutional constraints that govern what staff can actually offer and what the Commission will approve.

• Negotiating with Division staff on charges, disgorgement amounts, and civil penalties

• Advising on the practical implications of specific undertakings and compliance commitments

• Coordinating with the client's business team to ensure settlement terms are operationally workable

• Managing the public disclosure and reputational dimension of enforcement outcomes

Representing offshore crypto exchanges — domiciled in Seychelles, BVI, Cayman, or similar jurisdictions — facing CFTC, DOJ, or OFAC proceedings requires both regulatory depth and an understanding of how these businesses actually operate. The Binance, OKX, and BitMEX enforcement actions have established the compliance expectations against which all offshore exchanges are now measured.

• Analyzing the specific enforcement theory and factual basis for the action against the client

• Advising on DOJ exposure for founders and executives who are US persons or who travel to the US

• OFAC defense and remediation — sanctions exposure analysis, voluntary self-disclosure considerations

• Coordinating defense across multiple regulatory fronts when CFTC, DOJ, and OFAC are simultaneously involved

For clients with identifiable legacy exposure — past US-facing activity, US holders acquired through imperfect exclusion controls, or prior token sales that were not fully compliant — waiting to be discovered is not always the right strategy. Proactive engagement with the SEC or CFTC, including voluntary self-disclosure and remediation, can significantly affect outcomes.

• Stress-testing existing structures against current enforcement theories before a problem arises

• Advising on whether proactive disclosure is strategically appropriate given the specific facts

• Designing remediation programs that address the underlying compliance failures

• Structuring voluntary disclosure to maximize cooperation credit while managing litigation risk