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, sued the Securities and Exchange Commission for harassment, slander, concealment of an investigation, and deprivation of the right to counsel. Furthermore, the financial group claimed the SEC unfairly targeted small firms.

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 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 contacted 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 filed a finance defamation lawsuit.

Are Small Finance Businesses Targeted?

In the filing, Arjent suggest that the SEC purposefully targets 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. Our philosophy is simple: keep it under the radar and get it 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.

Contact us today to begin the confidential conversation.

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