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What is Criminal Securities Fraud and How Can a Lawyer Help?

March 21, 2024 Uncategorized

 

What is Criminal Securities Fraud and How Can a Lawyer Help?

Securities fraud is a big deal. It involves lying to investors to get their money. That’s illegal for a good reason – it hurts a lot of people. Let’s break it down so you understand what it is, and how a lawyer can help if you’re accused of it.

Securities are investments like stocks, bonds, and other financial products. Companies sell securities to raise money from investors. But there are strict laws about how companies can promote and sell securities. It protects investors.

The main law is the Securities Exchange Act of 1934. It created the Securities and Exchange Commission (SEC) to enforce securities laws. The SEC’s job is protecting investors from fraud. Securities fraud is when companies or people lie or mislead investors about securities to get their money. That’s illegal.

Some examples of securities fraud:

  • Lying about a company’s profits or assets to make the stock price go up
  • Not telling investors important negative info about the company
  • Insider trading – company execs using secret info to trade stocks
  • Pump and dump schemes to manipulate stock prices

Securities fraud hurts investors who lose money. It also damages public trust in financial markets. So the government takes it very seriously. There can be huge fines and years in prison for securities fraud.

Criminal vs Civil Securities Fraud

There are civil and criminal laws against securities fraud. In civil cases, the SEC sues companies and people for violations. Fines and bans from the industry are common penalties. Criminal charges mean possible prison time. Prosecutors must prove intent to defraud investors beyond a reasonable doubt.

Examples of criminal charges:

  • Wire fraud
  • Mail fraud
  • Conspiracy
  • False statements

Prosecutors often charge multiple crimes for one case. Penalties can add up to decades in prison. Insider trading cases are a big focus for criminal charges.

How Lawyers Defend Securities Fraud Cases

Fighting securities fraud charges takes experience. The laws are complex. The SEC and prosecutors hit hard. A lawyer can protect your rights and defend you.

Good securities fraud lawyers know the system. They can get charges reduced or dismissed. Smart defense strategies include:

  • Attacking flaws in the prosecution’s case
  • Showing you acted in good faith, not fraud
  • Arguing the law doesn’t actually apply
  • Negotiating plea deals with less prison time

Securities cases often use lots of documents, emails, phone records and financial statements as evidence. Lawyers dig into the details to find inconsistencies and reasonable doubts. It’s complex work.

Let’s discuss some typical defenses lawyers use:

You Didn’t Knowingly Commit Fraud

Prosecutors must prove you intended to defraud investors. If you acted in good faith or made an honest mistake, that helps fight charges. Your lawyer will gather evidence showing your intent wasn’t fraudulent.

The Law Doesn’t Apply

Securities laws have exceptions and technicalities. Smart lawyers exploit them. For example, maybe your financial products weren’t technically “securities.” Or you had authority to trade stocks when you did. Knowledge of securities regulations helps find defenses.

Free Speech Defenses

The First Amendment protects free speech. Your lawyer can argue that your statements were opinions, not fraud. Or that you had a right to share business info investors wanted. Free speech defenses are common in securities cases.

Cooperation and Plea Deals

If evidence of fraud looks very strong, admitting wrongdoing and cooperating with prosecutors may help. Government wants insider info on fraud schemes. Giving substantial assistance can lead to reduced charges or lighter sentences in plea deals. But it requires coming clean. Lawyers negotiate the best deals possible.

Responding to a Securities Fraud Investigation

Learning you’re under investigation for securities fraud is scary. Stay calm, get a lawyer fast, and don’t talk to investigators without them. Here are smart steps if you’re under investigation:

  • Get experienced counsel immediately. Ask people you trust for referrals.
  • Say nothing to authorities without your lawyer present. Even if you’re innocent.
  • Follow your lawyer’s advice about responding to subpoenas for documents or testimony.
  • Hire a forensic accountant if needed to analyze financial records.
  • Ask about your rights and possible defenses. Explore options.
  • Stay positive and focus on your defense strategy. Don’t panic.

A securities fraud investigation doesn’t mean you’ll be charged. But smart legal help improves the outcome. An experienced lawyer protects your rights while navigating the complex securities laws. They know how to build the strongest defense.

Finding the Right Lawyer for You

Facing securities fraud charges or investigations is frightening. But with an experienced lawyer’s help, you can get through it. Make sure you hire someone with specific experience in securities cases. Ask candidates about their track record and typical strategies. Meet with a few lawyers before deciding.

Cost is a factor too. Securities cases can involve millions of documents and many billable hours for lawyers. Make sure you understand fee structures and how costs might add up. Get fee estimates in writing.

Most of all, find a lawyer you trust and can work with closely. You need someone sharp but also caring. Don’t be afraid to ask lots of questions upfront before hiring them. This is a big decision.

Securities fraud charges shouldn’t be faced alone. An experienced lawyer can defend your rights and freedom. With smart legal strategies, positive outcomes are possible. Don’t wait to seek help if you’re being investigated or charged. A good lawyer can make all the difference.

 

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Todd Spodek

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JEREMY FEIGENBAUM

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CLAIRE BANKS

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RAJESH BARUA

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CHAD LEWIN

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