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SEC investigations (continued)

• Informal investigation phase

– May begin with a letter from the SEC

– Relies on cooperation from the target company
– SEC has no formal subpoena power

– Ends with a recommendation that the SEC

– close the case,

– seek sanctions, or
– issue a formal order of investigation.

• Formal investigation phase

– The SEC issues a formal order of investigation

– Staff can issue subpoenas and administer oaths
– Makes recommendations to the SEC

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