SEC Roundup Ep 104: Fix the Gate, Don't Shoot the Gatekeeper

Mark, maybe I could start out by just giving a quick overview of the case that Mona is involved in.

So this was a complaint filed by the SEC after the usual pre-litigation investigation.

It was filed in 2023 in the Southern District of New York.

There are a number of defendants in the case, but Mona and her law firm are named as defendants, and we'll get into this a little bit later, somewhat unusually as defendants on what's a Section 5 violation, which is a violation of the registration provisions of the securities laws.

There's no allegation of fraud, no allegation of any harm caused to investors by any actions by Mona or her firm.

And more surprisingly, we'll get into this a little bit.

The SEC, in our view, did not fully investigate the allegations that they made in the complaint against Mona and the firm.

For example, they alleged in part that none of the securities offerings that Mona's office was involved in, and by the way, these are all EB-5 offerings, so involving immigrant investors making investments into companies in this country to help their visa prospects.

The allegation by the SEC was that none of the offerings qualified for an exemption to the registration requirements for private placement offerings.

We found out, along with our co-counsel, McGuire Woods, during the litigation that, in fact, the SEC had not investigated that claim and had not reviewed many of the documents that were provided during the investigation.

We'll get into those details in a minute.

But I think that gives a useful overview.

This is litigation that's been going on for three years, so a long time.

It's very hard on any defendant to go through that.

about a non-fraud claim with no allegations of investor harm by Mona or her firm.

So I think that's a good overview.