Guide to White-Collar Crime Litigation in Boston

Boston: White-Collar Criminal Defense

Significant Boston white-collar crime prosecutions (whether measured in dollars, size or number of victims) are typically handled on the federal level. However, there are agencies at the state-level (such as the Massachusetts Attorney General’s Office) that also prosecute white-collar offenses. Set forth below is a basic overview of the various agencies and organizations in Massachusetts that handle white-collar prosecutions.

Federal Law Enforcement

1. U.S. Attorney’s Office for the District of Massachusetts

• What They Do: As part of the U.S. Department of Justice, the US Attorney’s Office for the District of Massachusetts, is, without doubt, the market leader for prosecutions for white-collar crimes in the Boston area, bringing charges for securities fraud, healthcare fraud, tax evasion, and public corruption, amongst other offenses.

• Notable Units/Focus Areas: There are multiple units within the US Attorney’s Office that focus on white-collar crime. There is a health care fraud unit, a financial fraud unit that primarily handles securities fraud prosecutions, and a public corruption unit, amongst others. In addition, some of the other units, such as the drug units or major crimes unit, can handle some smaller-level white-collar cases as well, particularly those related to money laundering.

• How They Operate: Typically, the US Attorney’s Office works closely with federal investigative agencies like the FBI, IRS and SEC to build complex cases, although, at times, the Massachusetts State Police can become involved too.

2. Federal Bureau of Investigation (FBI) – Boston Field Office

• What They Do: Everyone knows the FBI from TV, so its inclusion on the list here is not that shocking. Nonetheless, it is important to note that the FBI’s Boston Field Office plays a central role in investigating most federal white-collar crimes, particularly in the areas of health care fraud and securities fraud. They gather evidence, conduct interviews, and use forensic accounting tools to uncover financial wrongdoing.

• Key Areas of Enforcement: Corporate fraud, securities fraud, mortgage and insurance fraud, money laundering, and public corruption.

• Local Engagement: The FBI, which has headquarters in Chelsea, Massachusetts (just outside of Boston) frequently partners with the U.S. Attorney’s Office, SEC, and other federal and state agencies to coordinate investigations into white-collar crime.

3. Securities and Exchange Commission (SEC) – Boston Regional Office

• What They Do: The SEC’s Boston Office is very active. The Office oversees compliance with federal securities laws for firms, brokers, and investors in Massachusetts and surrounding New England states, although the cases brought by the Boston SEC tend to be national in focus as virtually every SEC case, so long as there are investors nationwide, can be brought in any judicial district. Recently, the SEC has focused on insider trading, accounting fraud, Ponzi schemes, and other securities-related violations, such as pump and dump schemes. Crypto schemes are becoming more and more the focus of the SEC’s enforcement resources.

• Local Impact: Boston is a major financial hub with numerous asset management firms, investment advisers, and biotech startups, making this office very active in monitoring securities compliance and detecting fraudulent investment schemes. The SEC Boston has become well-known for going after penny stock promoters as part of pump and dump schemes, and has recently delved into crypto market manipulation schemes as well.

4. Internal Revenue Service Criminal Investigation (IRS-CI) – Boston Field Office

• What They Do: IRS-CI focuses on tax-related crimes, including tax evasion, filing false returns, and laundering illicit funds. The IRS frequently works with other federal agencies, such as the FBI, to bring important cases.

• Why It Matters: The IRS has taken on a significant role complimenting the FBI in investigating and prosecuting large-scale frauds. If the IRS is involved though, they typically demand money laundering or tax evasion charges that will add scope (and potentially prison time) to any federal indictment.

5. Other federal agencies

While the FBI and IRS definitely investigate the most federal crimes in the Boston-area, other agencies also have their own law enforcement agencies. The Department of Homeland Security typically enforces trans-national white-collar crimes. The Department of Health and Human Services goes after crimes involving federal health care dollars. And the Food and Drug Administration, as another example, investigates all types of drug and food misbranding that can be prosecuted as either misdemeanors or felonies.

Commonwealth of Massachusetts: State Resources in Investigating and Charging White-Collar Crime

As noted, federal agencies prosecute the vast bulk of white-collar crimes in Massachusetts. However, this is not to say that state agencies do not play a pivotal role as well. State organizations oversee a wide range of financial misconduct, from consumer fraud to corruption within public institutions. Understanding their jurisdictions and processes can help individuals and companies better navigate—or ideally avoid—entanglements with the state’s criminal justice system.

Massachusetts Attorney General’s Office (AGO)

The Massachusetts Attorney General’s Office is the most prominent state agency to prosecute and investigate white-collar crimes within the Commonwealth. This office investigates and brings charges against individuals and entities suspected of engaging in illegal financial activities, including, but not limited to:

• Consumer and Investor Fraud: The AGO prosecutes businesses and individuals who employ deceptive practices, from misleading advertising to fraudulent investment schemes that harm consumers and local investors.

• Healthcare and Insurance Fraud: Given the prominence of the healthcare sector in the Boston area, the AGO, on occasion, prosecutes fraudulent billing, kickbacks, and unauthorized claims within medical and insurance fields.

• Public Corruption and Procurement Fraud: The AGO’s Public Integrity Division targets (generally small-scale) wrongdoing by public officials and entities that misuse public funds, manipulate contracts, or engage in bribery.

How the AGO Operates:
The Attorney General’s Office often collaborates with the state police and its own internal investigators; however, the AG also works with federal agencies, local law enforcement, and specialized investigative bodies to build cases. The AGO is perhaps more active than the federal government is encouraging whistleblowers, victims, and concerned citizens to report suspected wrongdoing, enabling more proactive enforcement efforts.

Massachusetts Securities Division

The Massachusetts Securities Division operates under the Office of the Secretary of the Commonwealth. The Securities Division is tasked with enforcing the Massachusetts Uniform Securities Act, which is very similar to the 1933 and 1934 Acts on the federal level. This legislation mandates the registration of securities offerings and the licensing of financial professionals, including broker-dealers and investment advisers. The Division's primary mission, it claims, is to protect investors and ensure a fair and competitive securities market within the Commonwealth.

Over the years, the Division’s influence has waxed and wanes depending on priorities, but typically, it has focused on a few main areas:

• Regulation and Oversight: The Division enforces the Massachusetts Uniform Securities Act, mandating the registration of securities offerings and the licensing of broker-dealers, agents, investment advisers, and their representatives.

• Investor Protection: The Division is focused on investigating and prosecuting fraudulent activities by broker-dealers and investment advisors. The Division has long maintained a focus on regulating the activities of broker-dealers and investment advisors both within the Commonwealth and outside the Commonwealth.

• Enforcement Actions: The Division has the authority to conduct investigations, hold administrative hearings, and impose sanctions such as fines, license suspensions, or revocations against entities and individuals violating securities laws.

Typical Cases Prosecuted by the Massachusetts Securities Division

The Division attempts to regulate a variety of securities violations, including:

• Fraudulent Securities Offerings: Pursuing entities that offer unregistered or fraudulent investment opportunities to Massachusetts residents.

• Unethical Broker-Dealer Practices: Investigating misconduct by broker-dealers, such as unsuitable investment recommendations or failure to adhere to fiduciary duties.

• Insider Trading: Enforcing laws against trading based on non-public, material information.

Notable Cases

• Robinhood Financial LLC: In 2020, the Division filed a complaint against Robinhood, alleging unethical practices related to the "gamification" of trading and failure to act in customers' best interests. The case culminated in a $7.5 million settlement in 2024.

• Bulldog Investors General Partnership: The Division found that Bulldog Investors violated the Massachusetts Uniform Securities Act by offering unregistered securities via email to a state resident. The decision was upheld by the Massachusetts Supreme Judicial Court.

• Morgan Stanley/First Republic Bank: In 2024, Morgan Stanley was fined $2 million for failing to properly monitor trades by the executive chairman of First Republic Bank, which raised concerns about potential insider trading.

• TradeStation Crypto Platform: In late 2024, the Securities Division went after TradeStation for violations of the Mass Securities Act for unlawful activities related to the buying/selling of crypto-assets.

How Dynamis Can Help

Massachusetts is a tricky jurisdiction to navigate. There are many different players and many different agencies that investigate similar, overlapping crimes. Frequently, activities can be investigated at the state level as well as the federal level. The Massachusetts Securities Division also has its own set of, at times, arcane procedures that involve administrative hearings. Dynamis has the local knowledge at the federal and state level to help individuals navigate the bureaucracy of Massachusetts.

For expert legal advice, contact Dynamis LLP or attorneys Eric Rosen or Michael Homer today. We’re here to guide you through every step of your case.