Enforcement Action Defense

Experience

Handled and defended diverse prosecutorial and regulatory matters, including investigations and subpoenas by the Department of Justice, SEC, IRS, FINRA, New York Attorney General, and New York County (Manhattan) District Attorney.

Won complete dismissal of SEC enforcement action litigated in federal court. See Sec. & Exch. Comm’n v. Gentile, 2017 WL 6371301 (D.N.J. Dec. 13, 2017).

Won three-week federal court counterfeit fraud trial, including an award of punitive damages, which was upheld by the Second Circuit Court of Appeals. See Koch v. Greenberg, 14 F. Supp. 3d 247 (S.D.N.Y. 2014), aff’d, 626 F. App’x 335 (2d Cir. 2015).

Successfully defended alleged federal copyright infringement action, with plaintiff entirely walking away from the claim.

Agencies are Taking Enforcement Actions against Blockchain Companies

Some of these agencies have initiated enforcement actions against blockchain companies and individuals associated with them, imposing heavy civil and criminal penalties for the launch of non-compliant ICOs or other violations of U.S. securities law.

During a September 20, 2018 speech, Co-Director of the Securities and Exchange Commission (SEC) Division of Enforcement, Stephanie Avakian, asserted that the Enforcement Division “will likely recommend more substantial remedies against [token] issuers that fail to comply with the registration requirements” and that the Enforcement Division is “looking beyond the issuers of ICOs.”

The SEC is not the only agency with the power to issue subpoenas, conduct investigations, and bring enforcement actions in the FinTech and crypto fields.  The Financial Industry Regulatory Authority (FINRA), although a nongovernmental enforcement agency, is also investigating potential securities violations and bringing formal disciplinary actions against companies and individuals which can result, in fines,  suspensions, and exclusion from the industry.

Financial Crimes Enforcement Network (FinCEN) and the Commodity and Futures Trading Commission (CFTC) also subpoena blockchain startups, money services businesses, and cryptocurrency exchanges nationwide as part of investigations into failure to register, inadequate customer due diligence (KYC/AML), potential fraud in trading cryptocurrencies, etc.

Non-compliant activities may result in significant fines and even criminal charges. However, each investigation, enforcement action, and subpoena must be carried out for a proper purpose, under a proper procedure, and within a reasonable scope. It is critical to consult with experienced counsel (preferably with prior governmental experience) to select a strategy for responding and possibly objecting to SEC and other investigatory subpoenas, as well as to communicate on your behalf during any investigation or settlement discussions.

Our firm can help individuals and companies targeted by such investigations and enforcement actions, including those taken by the:

  • U.S. Department of Justice;
  • United States Attorneys Offices (federal prosecutors);
  • Internal Revenue Service (IRS);
  • Securities and Exchange Commission (SEC);
  • Financial Crimes Enforcement Network (FinCEN);
  • U.S. Commodities Future Trading Commission (CFTC);
  • Financial Industry Regulatory Authority (FINRA);
  • New York State Attorney General;
  • New York County (Manhattan) District Attorney; and
  • other regulators.

Effective Defense Against Agency Actions

At Dilendorf Law Firm, we leverage our extensive experience in blockchain regulatory compliance to provide clients facing agency investigations, subpoenas for information and testimony, and enforcement actions comprehensive services.. We represent our clients throughout the investigatory or enforcement process, including by:

  • timely responding to agency subpoenas or challenging such subpoenas when appropriate;
  • appealing adverse decisions to a court of appropriate jurisdiction;
  • advising clients regarding their rights and obligations during investigation or enforcement action and protecting clients’ rights throughout the process;
  • corresponding with agencies on behalf of clients regarding investigations, subpoenas, or enforcement actions;
  • formulating a comprehensive strategy for resolving enforcement actions taken against our clients through settlement negotiations, as well as administrative or trial proceedings; and
  • reviewing clients’ activities and counseling them regarding changes to ensure future compliance.

For more information about our enforcement action defense services,

Please contact Dilendorf Law Firm by sending an email or calling us at 212.457.9797.

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