Who regulates what
At the federal level, the SEC writes and enforces rules for securities offerings, public company disclosure, broker-dealers, investment advisers, and trading. FINRA, a self-regulatory organization, supervises brokerage firms and their registered representatives. States have their own securities laws, and in New York the Attorney General enforces a broad state statute that gives that office wide investigative power. The SEC's enforcement authority is civil; federal criminal securities cases are brought by the Department of Justice, and state prosecutors can bring their own, sometimes in parallel. Knowing which body is asking matters, because each has different powers, procedures, and consequences.
Activities that trigger the rules
Selling investment interests to others generally requires either registration or an exemption, and that can include interests in LLCs, promissory notes, revenue shares, and some digital tokens, not only stock. Receiving pay tied to transactions for bringing investors to a deal can raise broker-dealer registration questions. Managing other people's money for a fee can trigger adviser registration at the federal or state level, depending on size and structure. Public companies carry ongoing disclosure obligations and need controls around insider trading. Whether a particular crypto asset is a security has been contested and the regulatory approach has shifted, so current guidance should be checked against the specific asset and how it was sold.
When a regulator calls
An inquiry may arrive as a voluntary request for documents, a subpoena, or a call from an examiner. Responding promptly matters, and so does responding through counsel, because informal answers given on the phone can shape the matter for a long time. The first steps are usually preserving relevant records, deciding who in the company should and should not speak with the staff, and understanding whether the inquiry is about the company or about specific people. Knowingly giving false information to a federal agency is a separate offense. With an inquiry in hand, we review what the regulator has asked for, the business activity behind it, and whether individuals need their own representation.
