SEC Details Monetary Recovery Processes for Defrauded Investors

The SEC Office of Investor Education and Advocacy ("OIEA") outlined the ways in which victims of federal securities law violations may recover money. In an Investor Bulletin, the OIEA described multiple processes built to compensate investors and highlighted:

  • SEC fair funds and disgorgement funds from court or administrative proceedings;
  • receiverships in federal lawsuits;
  • brokerage account customer protections under the Customer Protection Rule (Exchange Act Rule 15(c)3-3);
  • corporate bankruptcy proceedings; and
  • private class action lawsuits.

The OIEA explained that not all defrauded investors will receive damages. Those investors who do, the OIEA cautioned, "may receive substantially less than their losses" and may have a long wait before receiving any payments.

Premium Content

Available only to Premium subscribers.

 

Tags