IMPORTANT TO NOTE: While we will remain open to meeting in person, in response to COVID-19, we are offering clients the ability to connect via telephone or video conference should they prefer. Please call the office to discuss your options further.

Assertive Representation In State & Federal Court

Do you know what constitutes securities fraud?

On Behalf of | Feb 23, 2021 | White Collar Crimes

Investors have many various investment opportunities to choose from these days. While stocks and bonds have been around for some time, digital currencies are relatively new on the scene. Many investors understand that taking risks is part of investing. Polished sales pitches can be quite convincing, though.

Investors may find it challenging to determine whether an opportunity is merely risky — or actually illicit. Business owners, financial advisors and investors alike can end up facing securities fraud charges if they’re not careful. 

Examples of investment actions that can lead to criminal charges

Every corporation’s officers or board of directors has a fiduciary duty to provide shareholders with accurate information about the financial health of the company in which they’ve invested. These corporate officers or directors may face securities fraud charges if they provide shareholders with inaccurate information to minimize the chances of them selling off their shares in a dying company. 

It’s also not uncommon for financial advisors to face securities fraud charges for intentionally misleading their clients into making certain investment choices that they knew wouldn’t be beneficial to them. Someone can even face fraud charges for intentionally spreading false information about investment vehicles as a way to artificially inflate their value so that they can make a tidy profit in a quick sell-off. 

Insider trading, which involves someone with privileged information about a company and tipping stockholders off about it before it becomes public knowledge, is also illegal. Company owners must first inform their board of any potential financial concerns before disclosing them to investors, and not doing so is illegal.

Don’t take securities fraud charges lightly

In other words: All is not fair when it comes to making money from investments. There are rules that level the playing field for everyone, and you have to follow them.

State and federal prosecutors often invest significant resources in investigating and building cases, especially if they involve alleged financial impropriety and substantial sums of money. You don’t want just anyone representing you in your Cincinnati case. Work with an attorney who understands the situation and the seriousness of the charges against you.