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Securities Fraud

The federal laws that govern the sale and transfers of securities are very strict and very complex. Specifically, the US Government has made it illegal for any person or entity to commit fraud concerning the sale or transfer of a security. Not only could someone accused of this action be liable for civil penalties and lawsuits, but the Securities and Exchange Commission (SEC) may also pursue criminal charges.

A Michigan federal securities fraud lawyer knows the laws surrounding securities fraud and can use their knowledge to your advantage. A qualified federal fraud attorney can help you navigate this extremely complex area of law to help achieve a positive outcome.

What is a Securities Fraud under United States Law?

At its basic level, a fraud is defined by Black's Law Dictionary as, "…consisting of some deceitful practice or willful device, resorted to with intent to deprive another of his right, or in some manner to do him an injury." In short, any action taken by a person with intent to cheat another through deception may be fraud.

Securities fraud is specifically defined in 18 U.S.C. §1348. This statute says that it may be illegal for any person to knowingly execute or attempt to execute any scheme intended to defraud someone in connection with any commodity for a future delivery or option for a future delivery. In the same vein, it may be illegal for any person to obtain any money or property that they know or should know is connected to securities fraud.

In simpler terms, a securities fraud can include activities such as:

  • Outright theft or embezzlement of client funds
  • Lying to auditors about financial practices and records
  • Making false statements on financial records
Penalties for Security Fraud

All of the aforementioned activities can be done in an attempt to deceive customers and regulators. Because of the potentially catastrophic economic impact of these activities, the statute prescribes harsh potential penalties.

The maximum prison term for these charges may be 25 years. In addition, the court may order a person to pay heavy fines and restitution to any defrauded investors. This offense is considered a felony and any person convicted may forfeit the right to vote or run for office.

Why is a Securities Fraud a Federal Offense?

Most criminal accusations are investigated and prosecuted by states. This is because federal laws are extremely limited in scope. The US government may only pass laws that control areas of law specifically named in the Constitution. One major area concerns the regulation of interstate commerce.

The trading and sale of securities plays a major role in interstate commerce. This is typically done over the telephone or over the internet. Both tools are instruments of interstate commerce and thus may be regulated by the federal government.

A Michigan federal securities fraud lawyer could help people understand the interplay between federal and state laws any why their case is governed by federal authority.

How a Michigan Federal Securities Fraud Attorney Can Help

If you are facing allegations of securities fraud, you may be scared and confused. Since the penalties can involve multiple years in prison and heavy fines, you need to take these allegations seriously. A powerful defense must begin at the earliest phases of a criminal case. A Michigan federal securities fraud lawyer could provide this defense.

They can help you create a defense that protects your personal and professional freedom. These charges can carry much more than legal penalties so contact an attorney today to schedule a consultation.

Client Reviews
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Patrick Barone is the ONLY choice for DUI defense. He was realistic from the start and made it a point to look at my case before taking my money. As a business owner, when I think of attorneys, I think of the "shark infested waters. Patrick is a shark alright, but his prey is not the client; it's justice for his client. Ten stars Patrick!! Chris F.
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