SEC Defense Attorneys for Securities Fraud
Facing trading or securities fraud allegations? Our team of experienced securities fraud lawyers is always ready to provide professional support. We will conduct a thorough analysis of documents and financial reports, develop a defense strategy, and represent the interests of clients during the SEC investigation and before the courts. A securities fraud lawyer will help minimize risks, preserve your capital, and protect your business from reputational losses.
Securities fraud is a complex legal matter that requires careful preparation, in-depth knowledge of the law, and an impeccable defense strategy. Mistakes or underestimation of the situation can lead to serious consequences in the securities industry ranging from large fines to criminal prosecution.
What is Securities Fraud?
Securities fraud is an illegal activity involving fraudulent transactions with stocks, bonds, futures, and other types of financial instruments. The main goal of SEC fraud is to obtain materials that benefit the perpetrator through distorted information, market manipulation, or abuse of investor confidence.
Main signs of criminal securities fraud according to the Foreign Corrupt Practices Act (FCPA) and other federal laws include:
- Distortion of information: fraudsters deliberately hide, omit, or distort important facts about the value of securities, the financial performance of the company, or the prospects for its development;
- Price manipulation: “acceleration” of stock prices through fictitious transactions, a sharp increase in demand, or the spread of false rumors to artificially inflate or collapse rates;
- Breach of trust: failure to comply with the duties of an investment consultant who, using the trust of clients, makes transactions in his own interests or to the detriment of investors;
- Use of insider information: A person who has confidential information about upcoming corporate events (mergers, acquisitions, etc.) buys or sells securities to make illegal profits.
Key consequence of criminal securities fraud is a financial loss. Institutional and individual investors lose funds invested in “dispersed” or falsified assets, and conscientious holders of securities may lose their savings due to falling rates.
An experienced federal defense counsel can identify potential risks and signs of fraud at the due diligence stage, before making an investment or concluding a contract. The specialist will develop a defense strategy, and collect evidence of innocence. We also try to conclude a favorable agreement despite having criminal securities fraud charges leveled against you.
Types of Securities Fraud Cases
Securities fraud can take various forms, but in all cases, it is aimed at illegally gaining profit or competitive advantage at the expense of investors and bona fide market participants. Let’s look at the most common types SEC fraud:
Insider Trading. Individuals with inside information about a company use this information to gain an advantage in the stock market before the information becomes public. Publicly traded companies are required to implement controls and corporate reporting mechanisms to prevent the leakage of confidential data to avoid insider trading.
Market Manipulation. Deliberate actions that distort the normal operation of exchanges or create a false impression of the level of supply and demand for specific securities. There are several subspecies of thype of unauthorized trading:
- Pump and Dump: Investors artificially “accelerate” the price of a stock (pump), spreading positive but false news and stimulating buying. After a sharp rise in price, they sell (dump) the asset, leaving other holders at a loss.
- Spoofing: Traders place large orders to buy or sell shares without the intention of executing them to create the illusion of strong demand or supply.
Financial Statement Fraud. Presenting false or misleading financial information about a company to investors, shareholders, or regulators in order to boost stock prices or hide losses. Such schemes often lead to high-profile corporate scandals and bankruptcies (for example, the Enron, WorldCom cases).
Ponzi Schemes. A fraudulent investment strategy in which the payment of profits to existing investors is based on proceeds from new investors rather than on actual returns. Example: the organizer promises a guaranteed high income (20–30% per month) without explaining the sources of profit. The influx of new money is used to cover “interest” payments to old clients, creating the illusion of stable income. When the supply of investors dries up, the scheme collapses and most investors lose their funds.
Abuses during IPOs and SPOs. During initial or secondary offerings (IPO, SPO) of shares, fraudsters can disseminate deliberately distorted information about the company or its prospects, provoking an artificial rush in the market.
Legal Consequences of Securities Fraud
In many jurisdictions, securities fraud constitutes a serious criminal offense that can result in significant legal consequences.
Government regulators like the Federal Bureau of Investigations and Financial Industry Regulatory Authority can impose multimillion-dollar fines depending on the extent of the damage caused and the degree of fault. Often the amount of the fine exceeds the illegal benefit obtained as a result of fraudulent transactions to create a deterrent effect.
If investors have suffered losses due to the unlawful actions of a company or trader, the court may order the perpetrators to compensate for the damage caused, including lost profits. In some cases, regulators may order “disgorgement”—the return of all proceeds received from illegal transactions.
In case of delay in payment of fines or compensation are subject to interest and civil or administrative penalties, which further increases the financial burden on the violator.
Depending on the severity, systematicity, and scale of the case, the accused may face prison time for defrauding investors and other financial crimes. In the US, such sentences can reach 5–20 years in prison, and in the EU – up to 10–15 years. That depends on the legal system and federal securities laws of a specific country.
Under mitigating circumstances (cooperation with the investigation, first offense, etc.), the court may impose a suspended sentence or probation with the obligation to comply with several restrictions.
Regulators may revoke the license of a brokerage firm, hedge fund, auditor, asset manager, or other professional financial services firms involved in fraudulent transactions. Companies may be removed from registers and lose the right to provide brokerage, custody or consulting services. The court may prohibit the offenders from holding leadership and management positions in listed companies or financial institutions.
Why Do You Need an SEC Defense Attorney?
The Securities and Exchange Commission has broad powers in matters of supervision and regulation of financial markets. If your activity is in any way related to securities trading, issuing shares, public offerings (IPOs), or any financial transactions, there is a risk of encountering audits and SEC investigations. This can lead to serious legal, financial, and reputational consequences. Therefore, it is important to enlist the help of an experienced lawyer as quickly as possible.
An SEC defense lawyer has up-to-date knowledge of all legal innovations and knows how to interpret securities litigation laws and precedents accurately. It will help identify risks long before they become violations.
Even the slightest miscalculation can result in civil or administrative enforcement actions that can cost your business or career. SEC defense lawyer will help minimize possible consequences, find the optimal solution, or defend you when charges are brought. Competent support at all stages allows you to control the situation in legal enforcement proceedings and prevent mistakes that can be used against you.
Our team of sanction lawyers offers comprehensive legal support, ranging from analysis and elimination of potential risks to representation in court and negotiations.
How Long Does an SEC Investigation Take?
SEC investigation is divided into several key stages, each of which has its own time frame:
- Preliminary Investigation. At this stage, the state securities regulators collect initial information and evaluate whether there are signs of violation of the law. Duration ranges from several weeks to several months;
- Formal Investigation. If potential violations are identified, the Securities and Exchange Commission launches an official SEC investigation, which includes an in-depth analysis of the activities of a company or person. Duration – from 6 months to when. The SEC may subpoena witnesses, request large quantities of documents, and review financial statements;
- Court Proceedings. After completing the investigation, the SEC may close the case without consequences, enter into a settlement agreement with the participants, or refer the case to court. The duration of the settlement and financial recovery ranges from several weeks to 6-12 months.
Promptly providing requested data and being prepared to resolve can significantly reduce investigation time. Refusal to cooperate or attempts to conceal information, on the contrary, slows down the process and may lead to additional sanctions. If the case involves activities in several jurisdictions, the investigation may be delayed due to the need for coordination with foreign regulators.
SEC fraud lawyer will provide prompt analysis of the case, which helps avoid unnecessary delays in providing information and eliminates the risks of escalation. Our lawyers negotiate with SEC representatives, helping to reach a favorable settlement agreement with the federal authorities and complete the process faster.
Can Securities Fraud Charges Be Dismissed?
Securities fraud – a serious charge that can lead to substantial penalties, imprisonment, reputational damage, and a ban on professional activities. However, the accused is not always responsible. There are situations in which a case may be dismissed:
- Lack of evidence. If the prosecution cannot prove that the defendant’s actions were intentional and intended to defraud, the court may dismiss the case. SEC fraud lawyer analyzes the evidence provided, identifies its weaknesses, and seeks to exclude inadmissible materials;
- Lack of intent. If a securities and commodities fraud lawyer was able to demonstrate that the actions were committed in error, without malicious intent, this may be grounds for dismissal of charges;
- Wrong qualification of the case. The actions of the accused may be incorrectly classified as securities fraud. For example, a common commercial mistake has been presented as deliberate fraud or unclear regulatory requirements have led to an erroneous interpretation of the law;
- Violation of the rights of the accused. If procedural errors were made during the investigation, this may lead to the dismissal of charges: lack of warrant, improper collection of evidence, violation of confidentiality rights or defense, and incorrect notification of the start of the investigation. Experienced SEC defense attorney analyzes all stages of the investigation to identify possible violations;
- Statute of Limitations. Statutes of limitations may vary depending on jurisdiction and type of violation. If too much time has passed since the alleged offense was committed, the charges may be dropped;
- Settlement. The parties can reach an agreement that suits both the regulator and the accused. This allows you to avoid legal proceedings and limit yourself to a fine or other sanctions.
The complexity of securities fraud cases requires a professional approach. Experienced SEC defense attorney will help assess the prospects of the case, collect and present evidence of innocence, and protect your rights in court.
How Our SEC Defense Attorneys Can Help You?
Interpol-Stop offers comprehensive legal support and expert solutions for those faced with investigations in the area of securities fraud or wishes to avoid possible violations.
We will conduct a thorough review of records, contracts, and correspondence to identify potential signs of impropriety. If necessary SEC defense lawyer interacts with auditors and financial experts, preparing reasoned responses to requests from regulators.
When facing the SEC investigations, our lawyers participate in interrogations, organize the transfer of documents, and develop a legal defense strategy. We strive to quickly resolve issues and minimize the risks of lengthy proceedings.
If the case is of interest to prosecutors or other law enforcement agencies, we build a competent line of defense, taking into account the specifics of criminal and administrative liability, as well as the peculiarities of federal securities laws.
Based on the collected evidence and analysis of legal positions securities and commodities fraud lawyer forms a plan designed to dismiss the charges or reduce the severity of the sentence. We involve financial or accounting firms, IT experts and other advisory firms with experts that can explain technical details and refute the prosecution’s arguments. If necessary, we will organize witness protection and interaction with international authorities.
If the trial court makes an unfavorable decision, our lawyers use all legal tools to review the case in higher courts. Our experienced securities fraud attorneys – either achieve the dismissal of charges, or minimize possible consequences, using all available legal tools and negotiation formats. We provide legal support at all stages – from the initial audit and verification of transactions to court hearings and appeals.
Contact us right now if you need protection or advice on issues related to securities fraud. Interpol-Stop lawyers are ready to offer an in-depth analysis of the situation, develop an effective strategy and protect your rights in dialogue with regulators and courts.
