Understanding Securities Fraud Charges and Defense

Financial fraud is a serious crime. It assumes even greater proportions if it involves fraudulent practices in the stock markets. Any criminal charge is a serious matter – and you need to find legal counsel for active defense immediately. However, before you talk to a lawyer, here is a quick look at the details regarding securities fraud.

What constitutes securities fraud? Use of any deceptive means in buying, selling or trading in securities is within this category of white-collar crimes. It may be falsifying a record or securities trading on it based on insider information – if the intention is to defraud, it is a crime.

Which actions may be termed as this? Here are the broad categories.

Falsification of information regarding a company, or its securities, to investors, with the intention to defraud them

Manipulation of accounting records regarding a company, its assets and liabilities, with the intention to defraud investors

Insider trading, i.e. buying, selling or trading in securities based on nonpublic information

What are the laws in this regard? State laws in this regard varies; however, the prominent federal laws in this regard are –

• The Securities Act of 1933 – directives regarding the issuance of company securities
• The Securities Exchange Act of 1934 – directives regarding the monitoring of the industry by the Securities and Exchange Commission (SEC)
• The Sarbanes-Oxley Act (SOX) of 2002 – directives regarding the enhanced standards of buying, selling or trading in public companies’ securities

Who enforces these laws? Primarily, it is the task of the SEC to monitor the industry and enforce the laws in case of any violation. Legal actions may initiate from a government agency or a private investor. The SEC conducts the investigation and prepares the case.

In most cases, when you face such a criminal charge, the SEC has completed its investigation and prepared prosecution. You need to get a criminal lawyer immediately to avoid losing any more time.

What penalties does a conviction imply? Conviction of such a crime means serious penalties. The SEC and the National Association of Securities Dealers (NASD) imposes hefty fines for such crimes. If it is grouped as felony, you may face also face imprisonment for a period of up to 20 years.

Apart from the penalties you may face, there is also the criminal record, which seriously jeopardizes your chances of getting a finance related job. Only a qualified and experienced lawyer has the necessary knowledge and expertise to investigate the matter, accumulate the evidence, analyze the facts, and prepare for defense.