Securities Fraud 101: What You Need to Know

Securities fraud is a specific type of white collar crime that occurs within the world of investments such as municipal bonds, stocks, investment contracts and bank notes. When somebody who is responsible for assisting clients with or working with these financial vehicles engages in theft, lies or cheating in the course of their responsibilities in order to enrich themselves, it constitutes securities fraud. Securities fraud can be prosecuted both on a federal case level and on a state level. There are many different ways that security fraud can take place, and you can be accused of having committed securities fraud even if you’ve never profited from any of your actions – all that needs to be proven is that you engaged in fraud with the hope of benefiting to be charged with securities fraud.

Securities fraud takes many forms, including:

  • Insider trading – If a person knows private information about a company and attempts to profit from use of that information by either buying or selling a security, it can be considered insider trading under certain circumstances.
  • Misrepresentation – If a person makes false statements about the value of a stock or security with the intent of having that false information lead to them making a profit, that can be considered fraud.
  • Churning – Churning is a manipulation of a clients’ activities. It involves encouraging a client to constantly sell or purchase securities with an unnecessary frequency with the intent of generating fees and commissions.

People who work in the world of securities have tremendous responsibilities – they not only advise people about how they should invest significant amounts of their personal assets, but also have access to information that is proprietary. There is an enormous amount of trust and honesty required of people in this position, and when that trust is betrayed there are serious penalties. Those who have been charged and convicted with securities fraud not only face the possibility of prosecution by the government leading to criminal penalties and jail time, but also being pursued for civil penalties including losing their license and having to pay significant monetary fines that can range from tens of thousands into the millions of dollars. Prison terms can last several years, as can probationary periods, and the person who is convicted of securities fraud can also be made to pay back the monies that they have stolen.

Being accused of securities fraud is serious business that can lead to the loss of your license and career, a long jail sentence, and fines that can take over your life. Defending yourself and clearing your name requires the guidance and legal representation of an experienced attorney with a record of successfully working on behalf of those accused of securities fraud. The Philadelphia law firm of Bochetto & Lentz is well respected for their knowledge of the intricacies of the regulations regarding securities transactions. Contact us immediately for assistance in defending yourself against a charge of securities fraud violations.

Learn more about how we can help with your Securities Fraud case HERE.

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