Finance Firm Says SEC Is Slander Happy, So It’s Suing.

business law
A financial firm sued the SEC over a field exam. The finance firm says that SEC harassed investors and slandered the firm during an investigation.

Arjent LLC, a boutique finance firm with domestic and international outposts, is suing the Securities and Exchange Commission for harassment, slander, concealment of an investigation and deprivation of the right to counsel. Furthermore, the financial group claims that the SEC is unfairly targeting small firms as a PR strategy.

Why Is An Investment Banking Business Suing the Securities and Exchange Commission?

In 2011, the Securities and Exchange Commission (SEC) launched a routine field investigation into Arjent LLC. According to the lawsuit, the financial firm’s CEO, Robert P. Depalo, complied with all requests. Regardless, the SEC continued to hound Arjent for additional information.

Perhaps not wanting to re-live another Enron Chewco embarrassment, field investigators seemed particularly interested in three financial entities listed as “outside business activities” for several Arjent employees – Brookville Fund Managers, Brookville Special Purpose Fund LLC and Pangaea Trading Partners LLC. But, according to the claim, “despite Mr. DePalo’s good faith cooperation with the Voluntary request, SEC staff remained unsatisfied and intensified its examination.”

Then SEC staffers began to contact investors, and according to the plaintiff, in the course of doing so, “slanderously insinuated to investors that Mr. DePalo illegally withdrew investor funds from Pangaea Trading Partners LLC.” The claimant also avers that the SEC “purposefully concealed the existence of a Formal Order of Investigation (“FOI”) while interviewing Mr. DePalo.”

Weary of the investigation and what he felt was misconduct on the part of SEC examiners, DePalo opted to file a finance defamation lawsuit.

Are Smaller Finance Businesses Being Targeted?

Artfully, DePalo’s team used the lawsuit to raise speculation about the SEC’s motives when it comes to exam targets. Using straightforward language, Arjent’s attorneys suggest that the SEC is purposefully targeting finance firms with less than 1,000 employees. A lack of in-house legal staff, claims Arjent, is the SEC’s sneaky impetus for stalking the small.

Arjent’s attorneys suggest that the SEC is purposefully targeting finance firms with less than 1,000 employees. A lack of in-house legal staff, claims Arjent, is the SEC’s sneaky impetus for stalking the small.

Why would the SEC rather investigate finance firms without in-house legal? Because the department thinks they’ll have a better chance at winning, which will help burnish the allusion of “effective regulation” into the public consciousness.

What’s Next in This Business Defamation Lawsuit?

Undoubtedly, an army of federal lawyers – and perhaps private consultants – will attack this case. And as is the case with most everything government-related, red tape will play a prominent role. Expect it to last a long, long time.

Get In Touch With A Lawyer That You Can Keep On Speed-Dial In Case of Emergency

Kelly Warner handles all manners of business defamation lawsuits – small or big. Our philosophy is simple: keep it under the radar and get ‘er done. Because the more time you spend litigating, the less energy you have for profit generating. Beyond that, public dirty laundry is usually not a good look. The ideal law firm is one that gets the job done, and doesn’t use your case for their own marketing gain.

Contact us today to begin the confidential conversation.

Yes, I Want to Speak with Someone about an Internet Law Issue »