Possible Consequences of a Securities Fraud Conviction

Securities fraud, a deceptive and unlawful practice, profoundly impacts the financial industry and the investors it serves. It involves deceiving investors to influence their buying or selling decisions, manipulate financial markets, or gain an unfair advantage. Securities fraud encompasses illegal activities such as making false statements, omitting important information, knowingly providing bad investment advice, or utilizing non-public, material insider information.

Some examples of securities fraud include:

  • High-yield investment schemes
  • Pyramid schemes
  • Late-day trading
  • Broker embezzlement

Understanding the severe consequences associated with securities fraud convictions is important. Beyond the legal penalties, which include fines and imprisonment, broader repercussions exist that can affect individuals and the financial industry. Recognizing the far-reaching impacts of securities fraud can play a crucial role in helping individuals charged with such offenses better prepare their defenses. By knowing the consequences they may face, defendants can work with their legal counsel to develop a robust defense strategy that considers the specific challenges they are likely to encounter.

If you are facing a federal crime charge, schedule a consultation with a member of our Los Angeles team by calling Lessem, Newstat & Tooson, LLP at (800) 462-7160.

The Legal Consequences of Securities Fraud

Concerning securities fraud convictions, the legal consequences can be severe and enduring. To fully grasp the potential ramifications, it's essential to understand the relevant laws and regulations governing securities fraud.

Securities fraud falls under the purview of various federal statutes and regulations. One such measure is the Exchange Act of 1935, a federal anti-securities fraud law. It establishes civil liabilities for plaintiffs harmed by securities fraud.

Additionally, the federal statute 18 U.S.C. § 1348 specifically addresses securities and commodities fraud, ensuring that those engaged in such fraudulent activities can be held criminally liable.

Possible Criminal Penalties

Securities fraud convictions can result in significant criminal penalties. Under Section 1348, the federal statute on securities and commodities fraud, individuals guilty of securities fraud can face substantial fines as punishment. Additionally, imprisonment is a possible outcome, with a maximum sentence of 25 years.

Possible Civil Liabilities

Aside from criminal penalties, securities fraud convictions can lead to civil liabilities. If it can be proven that a defendant knowingly misrepresented a material fact, and the injured party relied on that misrepresentation to make investment decisions resulting in financial losses, the defendant can be held civilly liable. In such cases, the injured party may seek compensation for their losses through civil litigation.

The Securities and Exchange Commission (SEC) is crucial in enforcing securities laws. When these laws are violated, the SEC can bring civil actions in federal court or before an administrative law judge.

The SEC’s enforcement actions aim to seek sanctions or remedies that address the misconduct, such as:

  • Requiring audits
  • Imposing civil monetary penalties
  • Suspending broker-dealer and investment advisor registrations
  • Censures
  • Barring association with the securities industry

In securities fraud cases, one of the key objectives is to strip away any ill-gotten gains obtained through fraudulent activities. This is achieved through disgorgement, whereby the defendant must return the illegal profits they got. Disgorgement aims to restore a sense of justice by removing any financial benefits from securities fraud. Additionally, forfeiture of assets may occur, particularly if they were acquired due to fraudulent activities.

How Securities Fraud Convictions Can Upend Careers and Personal Lives

Securities fraud convictions have a profound impact that extends far beyond the courtroom. The consequences reach the professional realm, affecting individuals' careers, reputations, and personal lives.

Let's explore the various ways in which securities fraud convictions can have lasting repercussions:

  • Loss of professional licenses and certifications
  • Barriers to future employment
  • Damage to professional reputation and personal relationships
  • Difficulty securing loans, credit, or investments

The ripple effect of securities fraud convictions can be devastating. It is crucial for individuals facing such charges to seek counsel to navigate the legal complexities and mitigate the potential repercussions. While the road to redemption may be challenging, it is not impossible.

The Importance of Skilled Defense: Safeguarding Your Rights

The value of retaining experienced defense attorneys cannot be overstated. Legal representation is vital in safeguarding your rights, mitigating the potential consequences, and mounting a strong defense.

For several reasons, having the right legal team is essential in criminal securities fraud cases. Securities fraud cases are complex and multifaceted, requiring in-depth knowledge of criminal law and the intricacies of the financial industry. Experienced attorneys focusing on securities fraud understand these cases' unique challenges.

Securities fraud convictions carry severe consequences that can impact your professional and personal life. Legal representation is crucial in seeking to minimize these consequences and protecting your rights.

Defense lawyers can thoroughly analyze the evidence against you, identifying potential weaknesses or constitutional violations. They can challenge unlawful procedures and advocate for fair treatment. Additionally, they can negotiate with prosecutors, seeking alternative resolutions that may result in reduced charges or lesser penalties.

Contact Our Firm Today

Securities fraud convictions can result in a domino effect of adverse outcomes. These include criminal penalties such as fines and imprisonment, civil liabilities that lead to financial compensation, the loss of professional licenses and certifications, barriers to future employment opportunities, damage to professional reputation and personal relationships, and difficulties securing loans, credit, or investments.

Given the complexity and severity of securities fraud cases, seeking legal counsel is not just advisable but imperative. Competent and experienced attorneys have the knowledge, insights, and resources to navigate the intricate legal landscape.

Discuss your criminal securities fraud case with one of our Los Angeles lawyers at Lessem, Newstat & Tooson, LLP. Contact us at (800) 462-7160.