Recent SEC Settlement Shows Remediation Goes a Long Way in Avoiding Fraud Penalties
A recent enforcement action provides real world guidance on cooperation and remediation credit under the current SEC enforcement program. On January 28, 2022, the Commission announced that it had settled fraud charges with a Silicon Valley technology startup, HeadSpin, Inc., without requiring a civil penalty or an admission of wrongdoing. Notably, the press release was titled, “Remediation Helps Tech Company Avoid Penalties.” The settlement offers a roadmap for how companies, especially young or startup technology companies, can successfully receive credit for cooperation and remediation should they later be investigated by the SEC.
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