Two former employees of a biotech have pleaded guilty to criminal charges of obstructing an SEC investigation. The Justice Department accuses one of the defendants with testifying falsely before the SEC about his manipulative purchases and sales of the OTC-traded biotech. The other employee is accused of providing a back-dated document to the SEC with the intent to obstruct the SEC’s investigation. The two defendants face prison sentences of up to 5 years for obstructing an agency proceeding.
Although the SEC only has civil enforcement powers, it can (and will) bring in the Justice Department if you lie to SEC investigators. Better to take your civil medicine (fine or industry bar) than to wind up a guest of the state.