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SEC Targeting Fraudulent Disclosures During Pandemic

By Russell Koonin and Adam Schwartz
July 01, 2020

In the midst the current COVID-19 pandemic, the SEC is paying attention. The Division of Enforcement has made clear that it will act, and act quickly, to stop fraudulent conduct that falls under its jurisdiction related to the pandemic.

Stephanie Avakian, co-director of the SEC's Division of Enforcement, has warned: "[T]he Enforcement Division is committed to swiftly shutting down COVID-19 investment scams, seeking trading suspensions where appropriate, and pursuing fraud charges against both entities and individuals when warranted."

The SEC has taken actions to back up Avakian's words. Most recently, the SEC's Miami Regional Office brought an enforcement action against a West Palm Beach company and its CEO for allegedly issuing false or misleading press releases claiming the company was able to acquire and supply large quantities of N95 or similar masks to protect wearers from the COVID-19 virus. And, as has been widely reported, the SEC has issued a litany of trading suspensions, including Zoom Technologies (not the video conferencing platform we are all using, hence the suspension due to confusion).

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