Question

CPA Sobel engages in insider trading of the shares of an audit client. She is caught. The SEC brings a civil action and forces Sobel to give up her insider-trading profits and pay a civil fine of three times the amount of the profits. Sobel thought she had been punished sufficiently, but then the DOJ began an investigation. Which of the following is true?

A) The DOJ can only bring civil charges and is not authorized to bring criminal charges.
B) The DOJ has no jurisdiction over matters involving insider trading.
C) The DOJ can only bring charges if the SEC declines to pursue the case.
D) The DOJ can choose to bring criminal charges to supplement the SEC's civil action.

Answer 1

The DOJ can choose to bring criminal charges to supplement the SEC's civil action.

Step-by-step explanation:

The correct answer is D) The DOJ can choose to bring criminal charges to supplement the SEC's civil action.

Under US law, insider trading is illegal and can result in both civil and criminal charges. In this scenario, the SEC (Securities and Exchange Commission) brings a civil action against CPA Sobel, forcing her to give up her insider-trading profits and pay a civil fine. However, the DOJ (Department of Justice) can independently investigate and bring criminal charges if they choose to do so, even if the SEC has already pursued a civil case.

It is important to note that the DOJ has jurisdiction over matters involving insider trading and can bring criminal charges regardless of whether the SEC declines to pursue the case or not.