The Securities and Exchange Commission (“SEC”) is responsible for enforcing federal securities laws and regulating the securities industry. Recently, the agency seems to have added disclosure of undocumented immigrant violations to their job description, which has made some companies nervous.
When the U.S. Immigration and Customs Enforcement (“ICE”) began investigating the country’s fastest-growing burrito chain, Chipotle in 2010, the employer ended up firing over 450 workers in Minnesota. These workers were unable to provide valid work documents which led to subsequent audits in several additional states. The SEC is apparently concerned about the disclosures that publicly-traded companies are making when they undergo an ICE investigation and to make sure their disclosures are complete. While Chipotle cooperated with the SEC by handing over 300,000 documents to the government, they claimed to be surprised when the documents were subpoenaed and investigations continued. Chipotle incurred more than $1 million in legal fees, plummeting stocks, and bad publicity for their company which made investors less than happy.
Some are concerned with the power that the SEC has placed upon itself. It is coming in to companies as more than an ethics checker, but as an overseer, accountant, and negotiator. This has led many to question if the SEC is not overstepping their boundaries by taking on this new job.
Currently, if a publicly-traded company is under investigation by ICE, “there are no express disclosure requirements related to immigration and employment. Many qualified securities lawyers will counsel in favor of silence. Sometimes companies get in bigger trouble for speaking when they have the opportunity not to do so,” according to Jacob Frenkal, a former SEC enforcement lawyer. The key thing to understand is that it seems that the SEC is keeping track of ICE raids on these large companies and seeks to expand the disclosures made by such companies.
Whether you are a large or small business owner, an investigation by ICE is not beneficial for any business in this economy. Working with an experienced immigration attorney to make sure that your employees’ immigration paperwork is correctly handled may help an employer avoid not only the initial ICE or Department of Labor investigation, but now apparently an SEC investigation if the company is publicly traded.
If you would like to discuss how your company might benefit from an internal review of your employee paperwork, give us a call at (314) 961-8200 today.