If you or your company has been contacted by the Securities and Exchange Commission (SEC) about an offense allegedly committed by an individual, investor, or entity, you need to protect yourself by calling an experienced securities fraud attorney today.
Being involved in an ongoing securities and investment fraud investigation doesn’t only put your career on the line — securities fraud is a serious federal crime that comes with steep financial penalties and mandatory prison time. Your freedom is on the line.
If you are in need of a federal criminal lawyer for white collar cases, contact Flanary Law Firm. Donald Flanary has experience navigating complex, high-stakes cases and dealing with aggressive federal agencies in a court of law.
Call Flanary Law Firm today at (210) 738-8383 for an aggressive, battle-tested defense.
What is securities fraud?
Securities fraud, sometimes referred to as “securities and investment fraud” or “stock fraud,” occurs when a business either creates false financial information or hides relevant financial information to influence the behavior of investors or stakeholders, usually to make them buy.
The Securities and Exchange Commission (SEC) defines fraud as “any misrepresentation or omission that has the potential to affect an investor’s decision-making process.” This definition has left room for interpretation, meaning that fraud can be anything from theft by deception from stockholders to outright embezzlement, but the most common forms that securities and investment fraud take include:
- Insider trading
- Stock embezzlement
- Misreported assets or debts
- Stock manipulation
- Misleading investors
- Dummy corporations
- Corporate misconduct
- Abusive short-selling
- Accountant negligence
- Pyramid and Ponzi schemes
Although a person accused of securities fraud will be charged under 18 U.S.C. § 1348, the Securities Act of 1933 and the Securities Exchange Act of 1934 are the pertinent federal laws governing securities fraud offenses.
The Securities Exchange Act of 1934 actually created the Securities and Exchange Commission (SEC) and gave them regulatory authority over the securities industry. The Securities Act of 1933 essentially accomplishes two things:
- It provides that investors receive financial and other significant information concerning securities being offered for public sale; and
- it prohibits deceit, misrepresentation, and other fraud in the sale of securities.
What is the average sentence for securities fraud?
Penalties for securities fraud are steep and range depending on the amount defrauded and the methods employed. For this reason, averages are difficult to estimate, but 18 U.S. Code § 1348 provides that those convicted of securities fraud be fined up to $5 million and spend up to 25 years in federal prison.
If you are convicted of federal securities and investment fraud, going to prison is a foregone conclusion, as is losing up to millions of dollars. Don’t be convicted. Call an aggressive Texas federal attorney to fight for you today.
How do you prove securities fraud?
To prove securities and investment fraud, it must be proved that a broker, financial advisor, or another industry entity intentionally or recklessly made a misrepresentation or omission of financial information to a customer that then relied upon that information, and suffered damages as a result.
“Recklessly” is an important word here. It means that in order to prove fraud the court does not necessarily have to prove intent. Even unintentional oversights that are seen as reckless or risky can become credible fraud allegations — and in a market that thrives on risk.
Is there a legal defense against securities fraud?
Securities fraud defense is complex, but many avenues for defense exist if you have the right attorney. Defenses include common defense tactics such as statute of limitation violations and improper obtaining of evidence, as well as those more specific to financial crimes.
- Proving Reliance: In order to prove that securities fraud was committed, although the court does not have to prove intent, they do have to prove reliance on the omitted or fabricated financial information. If the investor or buyer made their purchase decision but did not rely on the information provided, there may not have been fraud.
- Good Faith Belief: If the defendant believed in good faith that the financial information provided was true and sound, there may not have been fraud. Good faith only operates within reason, because recklessness is just as important as knowledge or intent.
- Lack of Knowledge: Securities and investment trading often involves a complex network of entities and swirling information. It can be very difficult to pin down just how and where information is fabricated or omitted, and people with no knowledge of the crime can certainly be near the center.
Not just any financial crime lawyer can navigate defense under a federal investigation. You need an attorney that has experience fighting in a federal court with federal agents. The Texas federal attorneys at Flanary Law Firm know how to fight the feds and win. Don’t gamble your reputation, your career, or your life – call Donald Flanary today.
Under investigation? Call a securities fraud attorney at Flanary Law Firm today.
If you or your organization has been contacted by the Securities and Exchange Commission (SEC) and you don’t already have a securities fraud attorney, you could be in trouble. Every day that you don’t hire an expert attorney is another day that you are left without a defense while the federal government is building its case against you.
Start building an aggressive defense today by hiring the best criminal defense attorney in San Antonio that you can find, like the attorneys at Flanary Law Firm. Call Flanary Law Firm at(210) 738-8383 or contact us online for a free consultation. Don Flanary takes on high-stakes federal cases all over Texas and fights for his clients like no other.
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