West Palm Beach
Insider Trading Lawyer
Experienced securities fraud defense attorney
Individuals, groups, or whole companies can stand accused of securities fraud. This federal crime encompasses misleading investors, manipulating stock prices, and insider trading. The U.S. Securities and Exchange Commission (SEC) monitors transactions to watch for suspicious events and responds to complaints. The FBI also follows up on complaints from people who report fraudulent activities involving securities and other investments. Accusations of financial misdeeds and crimes often revolve around complex activities and transactions that may or may not have broken federal regulations and laws. Due to the highly detailed nature of securities fraud, even a financially savvy person needs a West Palm Beach securities fraud lawyer to wage a strong defense.
Overview of securities fraud and insider trading
Criminal charges for securities fraud against someone in West Palm Beach, Florida usually arise from allegations that the person misrepresented the nature of an investment to convince people to part with their money. Some cases involve outright deception about what will be done with the money.
Insider trading, although a form of securities fraud, differs slightly from schemes that essentially rob investors. A person commits insider trading when choosing to buy or sell a security on the basis of non-public information. This activity typically meets the definition of a crime because it allows the insider to profit from an unfair advantage unavailable to others.
Only human creativity limits the ways in which securities fraud may take place. Some of the most common forms of the offense are:
- ponzi schemes
- pyramid schemes
- advanced fee investments
- foreign currency fraud
- broker embezzlement
- late-day trading
- high-yield investment fraud
- stock pump-and-dumps
Some perpetrators of securities fraud actively solicit investors with high-pressure sales tactics that lure them in with promises of high yields if they buy now. Other schemes that people get prosecuted for rely on secretly moving money in the hopes of no one noticing.
The rise of the Internet has made stock pump-and-dump actions easier because conspirators as well as unwitting participants spread information in online forums meant to force a stock price higher artificially. The people who planned the scheme sell before the price spike unravels.
The temptation to commit federal crimes like securities fraud has existed as long as financial markets. News archives contain many stories about people convicted of securities fraud, such as:
- The 1985 conviction of a Wall Street Journal columnist who coordinated activities with two stockbrokers based on what he would write about companies. Although he only collected $31,000 of the $690,000 in fraudulent earnings, he received an 18-month prison sentence.
- More recently in 2004, home lifestyle icon Martha Stewart was accused of insider trading related to the sale of ImClone stock. She was eventually sentenced to 10 months of prison and home confinement and fined $30,000 due her conviction for obstruction of justice.
The fact that Stewart went to prison for obstruction of justice highlights how imperative legal representation is before an accused individual makes statements to investigators. An insider trading defense lawyer in West Palm Beach could potentially insulate a suspect from making statements that enable criminal prosecution.
Do not say anything that might incriminate you. Speak with an attorney first.
How and when is insider trading illegal?
The investing world thrives on the exchange of information. Investors actively seek news that will give them insights into how best to trade stocks. The vast majority of this activity is legal, but people in West Palm Beach can knowingly or unknowingly slip into illegal territory when acting on stock tips, necessitating the services of a fraud attorney.
According to the SEC, the crime of insider trading occurs when a person or organization makes a securities transaction:
- On the basis of relevant and valuable information not available to the public
- Owns 10% or more of the company
Access to inside “non-public” information or significant ownership does not always amount to a crime. Insiders have legal methods for making trades by registering the sales with the SEC.
Penalties for securities fraud
The SEC has the option to take civil or criminal action against someone accused of securities fraud. A recent SEC civil lawsuit against a man in Delray Beach provides an example of a defendant reaching a civil settlement with the SEC. The man agreed to pay back investors who allegedly lost $2.8 million. The agreement did not force him to admit that he used their money for personal use, but it prevents him from contesting the allegations made against him.
Civil settlements typically involve repayment and other concessions. Criminal charges, however, unleash the possibility of imprisonment and fines, such as:
- up to 5 years in prison per each charge of securities fraud
- fines ranging from $10,000 up to millions of dollars
- probation for several years
The amount of money defrauded from the public greatly influences the severity of sentences. In March 2022, CBS 12 in West Palm Beach reported on the national case of a coin dealer who was convicted of running a multi-state Ponzi scheme valued at $200 million. A federal court sentenced him to 19 years in prison along with a $153 million restitution order. After being charged in November 2018, the defendant ended up pleading guilty to securities fraud. He took money from people to buy and sell silver bullion but used the money to pay previous investors or enrich himself.
How a federal defense attorney can help
In the aftermath of being arrested for securities fraud, you may not know what is going on. Federal authorities will be full of accusations and eager to get you to admit to wrongdoing. Securing assistance in West Palm Beach from a federal defense lawyer experienced in handling fraud cases gives you a chance to understand your situation and make informed decisions. A federal defense lawyer can explain your charges and outline your defense options.
Joffe Law, P.A. is also available to advise you if you are under investigation for securities fraud. We can act as intermediaries between you and federal investigators. We will advocate for your rights and strive to resolve the situation prior to the filing of criminal charges. Our law firm has been defending people from federal charges for over 35 years. For help in West Palm Beach, call our office day or night.