Your First Call When
Charged With A Crime

Photo of Robert Ernenwein and Michelle A. Mathes

Your First Call When
Charged With A Crime

Photo of Robert Ernenwein and Michelle A. Mathes
Photo of Robert Ernenwein and Michelle A. Mathes

Are you being charged with securities fraud?

On Behalf of | Nov 8, 2022 | White Collar Crimes |

If you are facing charges of SEC violations, it is important to understand what this means and the potential consequences. Securities fraud is a serious crime and can result in lengthy prison sentences and significant financial penalties. 

In this blog post, we will discuss what securities fraud is and the penalties if you’re convicted.

What are the elements of securities fraud?

Securities fraud is a white-collar crime that occurs when someone uses deception or misrepresentation to profit illegally from purchasing or selling securities. It can take many forms, including insider trading, accounting fraud, and market manipulation. While securities fraud is often committed by corporate insiders or high-level executives, it can also be perpetrated by individual investors. 

There are three primary elements of securities fraud

  • Misrepresentation occurs when a material fact is misrepresented, omitted, or inaccurate
  • Intention to defraud the investors
  • Reliance on the material misstatement or omission the investors use in making their decisions

For securities fraud to be proven, all three elements must be present.

In the United States, anyone convicted of securities fraud can be fined up to $5 million and sentenced to up to 20 years in prison. Furthermore, the SEC can seek civil penalties against individuals or companies engaged in securities fraud. These penalties can include disgorgement (repaying ill-gotten gains), civil fines, and bans from serving as an officer or director of a public company. 

The potential prison sentence and financial penalties are significant, and the possibility of being barred from serving as an officer or director of a public company can effectively end an individual’s career in the securities industry. Therefore, if you are facing charges of securities fraud, it’s imperative you contact someone who can defend you and protect your rights.