Securities Fraud

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DC Securities Fraud Attorneys

If you become aware that you are the subject of an investigation conducted by federal agencies like the SEC or FBI, it is important to recognize that the investigation may have been in progress for some time before you were informed. This highlights the urgency of seeking the assistance of a qualified federal securities fraud lawyer without delay. Their expertise can provide crucial guidance and support throughout the investigation process.

Parallel Investigations

It is crucial to recognize that an investigation initiated by the SEC can have both civil and criminal implications. In many cases, a parallel federal criminal investigation may be conducted alongside the SEC’s civil investigation, utilizing the information gathered. It is essential to approach the SEC’s civil investigative efforts with the understanding that they may directly impact a law enforcement agency’s criminal investigation. This means that any responses provided during SEC interviews or depositions could potentially be used against you in a prosecution involving securities fraud or related charges, including obstruction of justice. To navigate such situations, it is advisable to seek the guidance of a knowledgeable attorney with experience in federal securities fraud cases.

Collateral Consequences

If found guilty of securities or investment fraud offenses, individuals may face severe consequences, including lengthy imprisonment, substantial financial penalties, and the forfeiture of alleged ill-gotten gains. Moreover, professionals in the investment industry are at risk of losing their licenses, which would prohibit them from engaging in activities related to securities and financial services. Additionally, they may be disqualified from holding positions as directors or senior officers within public companies. It is crucial to seek legal counsel from an experienced attorney in securities and investment fraud cases to navigate these potential repercussions effectively.

Types of Securities and Fraud Investigations

Securities fraud is a broad term encompassing intentional deception or misrepresentation in relation to the buying and selling of stocks, commodities, or investment products.

Various forms of securities fraud are investigated by the SEC and other law enforcement agencies, often falling into specific categories:

  1. Insider Trading: Involves trading stocks or securities by individuals with access to material non-public information, typically employees of public companies. Legal precedents have shaped insider trading laws over time.
  1. Outsider Trading: A newer allegation arising from cyberattacks on corporations, where hacked information is allegedly used for securities transactions. Non-employee hackers are now targeted by the SEC and law enforcement.
  1. Churning: Refers to brokers enriching themselves at the expense of clients by engaging in excessive trades to generate commissions. SEC Rule 15c1-7 prohibits churning, considering it manipulative, deceptive, or fraudulent.
  1. Pump and Dump: Involves artificially inflating the price of low-value stocks through false positive statements. High-pressure sales tactics create demand, allowing perpetrators to sell at a profit, causing a subsequent drop in stock value.
  1. Accounting Fraud: Involves falsifying or destroying accounting records to misrepresent a business’s financial health or activities.

If facing allegations of securities fraud, it is crucial to seek guidance from a knowledgeable attorney experienced in handling such cases.

Federal Securities Fraud Laws

The securities and investment industry is governed by several federal laws, including:

  1. The Securities Act of 1933 and Securities Exchange Act of 1934: These laws regulate the trading of stocks and bonds, requiring disclosure of essential information and prohibiting fraud in securities offerings. The Securities Exchange Act established the Securities and Exchange Commission (SEC) for regulatory functions and civil investigations of securities law violations.
  1. The Glass-Steagall Act: Passed in 1933 and repealed in 1999, this law separated investment banking from retail banking.
  1. The Trust Indenture Act of 1939 (TIA): Designed to protect bond investors, this law mandates written agreements (indentures) for debt securities issued in public offerings, disclosing key details of the bond issue.
  1. Investment Company Act of 1940: Regulates companies primarily engaged in investing and trading securities.
  1. Sarbanes-Oxley Act of 2002: A response to corporate fraud, it established the Public Company Accounting Oversight Board and implemented reforms to promote corporate responsibility and prevent financial misconduct.
  1. The Dodd-Frank Wall Street Reform and Consumer Protection Act: Enacted after the Great Recession, this law focuses on consumer protection, financial product regulation, corporate governance, and transparency. It imposes strict regulations on lenders and banks to safeguard consumers and prevent future economic crises.

Securities and investment fraud allegations can be prosecuted under various federal laws, including charges of conspiracy, obstruction of justice (including document destruction under the Sarbanes-Oxley Act), mail fraud, wire fraud, and false statements. It is important to consult with an attorney experienced in federal securities laws when facing such allegations.

How We Can Help

If you find yourself facing a federal investigation related to securities fraud, it is crucial to seek immediate and strong legal representation. The federal government dedicates substantial personnel and resources to these investigations, making it essential to have a skilled and aggressive defense attorney on your side.

To ensure the best defense for your case, contact a DC federal securities fraud lawyer who has the knowledge and experience to handle such complex matters. By taking prompt action and seeking the right legal representation, you can work towards protecting your rights and mounting a strong defense against the allegations you are facing.