Securities Fraud

Securities Fraud (sometimes known as stock or investment fraud) is a violation of laws protecting investors, where deceptive practice induces investors to make wrong decisions based on false information.  Security fraud can be committed by brokers, financial advisors, corporations and private investors.  Brokers commit security fraud when they mislead/lie to clients or advice based on inside information.  Financial advisors commit security fraud by falsifying information on a company to make it more attractive.  Corporations can commit security fraud by manipulating company information through accounting fraud or misrepresentation.  

Private investors commit security fraud when they act on insider information.  Insider trading, one of the most common security fraud charges, was prohibited by law after the 1929 stock market crash, when Joseph Kennedy (the father of President Kennedy and a notorious inside trader himself) became head of the SEC.  President Roosevelt appointed Joseph Kennedy with a wry remark that a thief will be better at catching other thieves.  Insider trading involves the sale or purchase of a corporate stock (or other securities) by the corporation’s directors, officers, employees or major stockholders based on the information not available to the public.  Under the Sarbanes-Oxley Act and due to recent major cases such as Enron, Tyco, WorldCom, etc, a defendant convicted of a major security fraud can face a substantial fine and/or prison sentence if convicted by federal prosecutors..

Telemarketing fraud is different than securities fraud.  Telemarketing fraud is usually prosecuted in federal court under the wire fraud or mail fraud statutes plus the special telemarketing fraud statute relating to enhancement of penalties under certain circumstances.  For more information on telemarketing please refer to the wire fraud and mail fraud areas of the practice pages.

If you are charged with security fraud or are a suspect being investigated for such a violation of federal law, we invite you to contact Youngs and Associates immediately.  Do not provide oral or written statements to federal law enforcement.  We have the experience to deal with federal charges and obtain the best result under the circumstances.  Our attorneys are available anytime - 24 hours, 7 days a week – to discuss your case, and the first consultation is free of charge.  Remember that the penalty for securities fraud is a prison sentence of up to 20 years or more depending on the facts, other statues violated and whether the special sentence enhancement statutes apply.  Once again, prosecutors will stack other charges against you such as money laundering and conspiracy if anyone else is involved.  We encourage you to call our toll free number for advice now.