The SEC is a civil agency. It does not have criminal authority and cannot put you in jail no matter how much it might want to or how hard it might try. And yet... people still find ways to turn the SEC's civil case or investigation involving them into hard time in prison.

How is this possible? The main ways this occurs are when witnesses in SEC cases provide false testimony under oath (i.e., the crime of perjury), or provide false statements to government investigators (a crime under 18 USC Section 1001 even if not under oath, see the case against former attorney Melissa Mahler). When these crimes occur and can be proven, the U.S. Attorney's Office will not hesitate to bring a separate criminal case that will turn what had been "merely" a civil matter into a criminal matter.

Today, the SEC announced a development in its case against Trevor G. Cook that shows one more way that an SEC defendant can wind up in prison. In a court hearing that concluded today, Chief Judge Michael J. Davis (D. Minn.) ordered Cook jailed for failing to surrender more than $35 million in assets as a result of the SEC's fraud charges and asset freeze against him. The court agreed with the SEC that Cook had violated a court order freezing all of his assets, found Cook in civil contempt, and ordered U.S. Marshals to escort Cook from the courtroom to jail where he will remain until he is in compliance with the court's orders.

"Mr. Cook has elected to disregard the court's orders and will now be a guest of the federal correctional system until he mends his ways," said Merri Jo Gillette, Director of the SEC's Chicago Regional Office.

Chief Judge Davis ordered that Cook will remain incarcerated until he surrenders, among other things, "$27 million located in offshore accounts, a BMW and two Lexus automobiles, a submarine, a houseboat, a collection of expensive watches, a collection of Faberge eggs, Bon Jovi concert tickets, and $670,000 in cash." (Yes, you read that correctly--he must surrender a "submarine!")