Just a Reminder: Private Company Executives Can Be Held Liable Under the Federal Securities Laws

Although it is not always appreciated or taken into account, the fact is that executives of private companies can be held liable for statements or other actions made in violation of the federal securities laws. One very recent and high-profile example where this happened involved the SEC enforcement action (and subsequent criminal proceedings) involving the high-profile medical testing company Theranos. Recent SEC and Department of Justice actions involving an Indiana-based company underscores the fact that private companies can draw the attention of federal securities regulator, and that it is not just high profile Silicon Valley firms that are potentially at risk.   Background As discussed in a SEC’s litigation release (here), on February 12, 2019, the agency filed a civil enforcement action in the Southern District of Indiana against two former executives of Evansville, Indiana-based plastics manufacturer Lucent Polymers, former CEO Kevin Kunash and former COO…

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