To: PROLIFE who wrote (278524 ) 7/21/2002 5:44:57 PM From: Karen Lawrence Respond to The SEC doesn't just investigate anyone, as in the arbitrary IRS audits. No one, including the IRS, NASD, NYSE or other agencies or employees of the firm or investors complained to the SEC about Enron, nor did that stupid Sherron Watkins complain...ergo, no investigation. Lou Dobbs is a blooming idiot. SEC investigations may be prompted in a variety of ways including complaints by present or former disgruntled officers, employees, competitors, customers and private litigation plaintiffs, unfavorable media reports, SEC staff review of company filings, the failure to make such filings, and SEC, Nasdaq or stock exchange market surveillance programs. Recently the SEC staff has also begun a systematic review of the Internet. The required disclosure of disputesbetween the company and its auditors will usually prompt an investigation.SEC investigations are extremely broad in scope and have, in this respect, been likened togrand jury investigations. They may result in administrative, civil and/or criminal action against acompany, its officers and directors and others. In civil actions, remedies sought include: civil fines; disgorgement; permanent injunctions and orders barring one from future service as an officer anddirector of a public company. Where subpoena power is deemed necessary or advisable, the staff seeks a "Formal Order ofInvestigation" from the Commission, which authorizes the use of nationwide subpoena powers for theproduction of documents and sworn testimony. While some investigations are conducted informally,they should not be taken less seriously than formal investigations since equally serious action may resultfrom informal investigations. Unlike the Department of Justice, the SEC does not identify its "targets." Persons subject to the production of documents or testimony are cautioned by the staff to "assume theworst" in assessing whether one is a target or subject of the investigation. SEC investigations are deemed confidential by the Commission, and thus the staff does not discuss the existence, nature or results of pending investigations, although this does not necessarily ensure the confidentiality of aninvestigation. Indeed, disclosure of its existence by a public company may be required.
