Securities fraud is one of the many criminal actions referred to as "white collar crime." That's because the crime doesn't involve violence, it's financial in nature and it's usually carried out by professionals who wear a white collar to the office. Since being convicted of securities fraud could land you in jail -- for years in some cases -- you might want to familiarize yourself with the ins and outs of this offense.
One of the most common forms of securities fraud is "insider trading." This happens when someone with insider information gives it to someone else -- perhaps just before a merger or bankruptcy announcement. Armed with this information before everyone else, investors can make large investment profits by initiating trades before the public release of the news. Maybe a vice president of a large corporation knows that his company is about to release a subpar earnings report, so he liquidates all of his shares or buys short options on the company's stock. This would be an illegal insider trade.
Another variety of securities fraud involves the fraudulent offer and sale of investments. Maybe an investment advisor convinces a client to buy a certain investment, but the broker doesn't give the client all the material facts the investor should know before deciding whether or not to make the purchase. These material facts, had the investor known them, would have affected his or her decision to purchase the investment. In this kind of situation, the investment advisor would have committed fraud. Also, the advisor may have breached his or her fiduciary obligation to make recommendations that benefited his or her client.
Of course, not all individuals who have been accused of securities fraud are guilty of the offense, which is why -- if you've been charged with securities fraud -- you'll have every opportunity to defend yourself against the charges in court. Our law firm is standing by to listen to your story and advise you of your legal rights and options.