The attorneys at our Fort Worth criminal defense law firm are sometimes asked to explain white-collar offenses, especially securities fraud. This illegal action attempts to deceive investors into buying stocks or commodities based on false information. The buyer might suffer significant losses, and the seller violates securities laws. Different types of securities fraud include embezzlement, exchanging insider information, manipulating stocks, falsified information on company reports or dishonesty to company auditors.
The Role of the Securities and Exchanges Commission
The Securities and Exchange Commission oversees the industry, but critics claim that it does little to proactively protect investors. However, the agency investigated high-level corruption in the following highly publicized cases:
- Arthur Andersen
- Bernie Madoff and similar Ponzi schemes
- The sub-prime lending scandal and
- Related cases during the economic downturn.
Fraudulent Securities Schemes
The SEC looks into numerous types of schemes, such as:
- Dummy corporations – The scammers set up a new company, using a similar name to an existing business. They lead the buyer to believe that he or she is buying shares in the real business.
- Internet fraud – These individuals spread falsehoods throughout the Internet about a certain company, thus inflating the prices. They wait until the price has increased to a certain point and then sell all their holdings, taking advantage of profits before anyone else realizes their scheme.
- Insider trading – Insider trading means either trading stocks based on private knowledge about the company or trading stocks by insiders with large shares of the company. The first type of trading is illegal because of the private information that the insiders have. The second type of trading is permissible as long as the insiders follow regulatory requirements set by the SEC.
Other types of securities fraud include:
- “Short and distort” practices
- Ponzi schemes
- Boiler rooms and
- Microcap fraud.
Contact Our Fort Worth Criminal Defense Law Firm
For further information about securities fraud, contact our Fort Worth criminal defense lawyer at the Office of Bryan P. Hoeller.