Urbana Securities Fraud Lawyer
The term “fraud” is mentioned often in Title 18 of the United States Code. Most types of fraud are fairly easy to understand. For example, when a person commits mail fraud, it is fairly obvious that they use mail services to carry out fraudulent activity. Securities fraud, though, is not as easy to understand, and even people charged with the offense do not always understand why. Our Urbana securities fraud lawyer explains what the offense is, and how you can beat the charges, below.
What Is Securities Fraud?
‘Security’ is a broad term, but at its most basic level, it simply refers to any type of investment. Corporate stocks, municipal bonds, investment contracts, and banknotes are just a few of the different types of investments that are considered securities. Securities fraud then occurs when a person steals, cheats, lies, or deceives another person for their own financial benefit. The deception must involve an investment for security fraud charges to apply.
Most offenses pertaining to securities fraud fall under two pieces of federal legislation. These are the Securities Exchange Act of 1934 and the Securities Act of 1933. Due to the fact that these sections of law outline most securities fraud offenses, these crimes are usually prosecuted at the federal level.
Common Securities Fraud Offenses
Securities fraud does cover many different types of offenses, but some are more common than others. These include:
Insider trading: Stockbrokers, companies, and others dealing in securities are not allowed to disclose information about any specific investment unless it is public knowledge. When any party does disclose confidential information to only certain parties for their own financial gain, it is considered insider trading. In order for insider trading charges to apply, the non-public information must be material, or important, to the status of the investment.
Misrepresentations: While insider trading involves disclosing confidential information, misrepresentations refer to false statements about certain securities and usually, about how they will perform. For example, a stockbroker might lie to a client and tell them a certain stock is expected to perform well, even when they know it will not. The stockbroker does this to earn a bigger commission, and the investor loses money in the stock. Investors rely on a stockbroker’s ability to predict how a stock will perform, so intentionally making misrepresentations is a federal offense.
Churning: Churning occurs when a stockbroker excessively buys and sells stocks in a customer’s account for the broker’s financial gain, usually to increase commissions. For churning to occur, the stockbroker must have deliberately ignored the goals of their client.
Call Our Securities Fraud Lawyer in Urbana for Help with Your Case
If you are convicted of securities fraud, you face up to five years in federal prison. At Patel Law, PC, our Urbana securities fraud lawyer can help you avoid that sentence and the other consequences you could face. Call us now at 217.384.1111 or reach out to us online to schedule a free consultation and learn more.