The SEC has accused the Acme Company of fraud in connection with the sale of its securities to American citizens. Although the firm is American-owned, it is located in Switzerland. All of the accounts and business records of the firm are in several
Swiss banks. The SEC has been actively pursuing the case, although it has not been able to provide a great deal of hope for those victimized by the fraud. What factors are probably hindering the SEC, and how might this be handled?
Secrecy laws (which prohibit the disclosure of business records or the identity of bank customers) and blocking laws (which prohibit the disclosure, copying, inspection, or removal of documents located in the territory of the enacting country in compliance with orders from foreign authorities) probably are to blame. The SEC may take action under the 1977 Treaty of Mutual Assistance in Criminal Matters if the conduct involved constitutes a criminal offense under the laws of both the United States and Switzerland.
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