SEC’s Life Sciences Actions Utilize Novel Tools and Theories

Edward Imperatore and Jina Choi authored an article for Law360 discussing the recent securities enforcement focus of the U.S. Securities Exchange Commission (SEC) and U.S. Department of Justice (DOJ) on life sciences and healthcare companies and the need for public companies to implement internal controls for both accounting and trading activity to mitigate risk. 

“The government scrutinizes, among other things, accounting practices and trading activity involving companies that rely heavily on and tout earnings growth or are the subject of mergers and acquisitions, which are common characteristics of early-stage life sciences companies,” the authors wrote. “Because the DOJ criminal securities fraud investigations typically begin with a referral from the SEC, the SEC's use of data analytics has resulted also in DOJ scrutiny and parallel DOJ criminal cases.”

Read the full article.