Securities fraud occurs when information used by investors to make decisions is misrepresented by an individual or an entity. The misrepresentation is frequently used to manipulate financial markets to gain a financial advantage.
The many forms of fraud
Securities refer to various forms of financial instruments that have value, such as bank notes, stocks or municipal bonds. Securities function as a representation of investments in a common enterprise, such as corporate stock, from which investors expect to derive profitable returns.
Common forms of securities fraud include insider trading, misrepresentation of funds or a company and churning. Essentially, if false information is used to deceive investors to make a financial gain, it can qualify as securities fraud. It is important to note, the person committing the fraud does not need to profit from the activity, the intent to profit is the basis of the crime.
Securities fraud typically falls under federal jurisdiction through the Securities and Exchange Commission (SEC) and the National Association of Securities Dealers (NASD). Although South Carolina legislature has its own laws and penalties regarding securities.
Violations can result in both civil and criminal charges which carry steep fines and lengthy prison sentences. Along with possible fines and incarceration, those convicted of securities fraud often need to pay restitution to those who suffered a monetary loss because of the fraud.
A fraud charge can damage your reputation and ruin your career. Defense against a fraud charge involves complicated facts and thorough investigation. Working with an experienced criminal defense attorney as early in the process as possible will aid your case. An attorney will provide legal advice on how to proceed to reach the best possible outcome.