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Over time, more and more Americans have put their money and faith into the stock market in hopes of adding to their wealth. While investing in the stock market and into any other type of venture involves risk, the federal government is charged with protecting the integrity of the market on every level.
Below you will find examples of conduct that would be considered securities fraud, how the enforcement of securities fraud works, and how you should proceed if you face the difficult situation of answering to charges of this sort.
There are numerous acts that could be considered securities fraud, and below are some examples of the types of conduct that will draw scrutiny from the federal government:
Obviously, there are other modes of conduct that could result in an indictment for securities fraud, but those above represent common acts that result in investigations and prosecutions.
If securities fraud is suspected, there is usually a complaint filed with the government agency that is charged with investigating the investment markets. This agency is the Securities and Exchange Commission (SEC), and it is the primary enforcer of regulations passed by Congress meant to protect the integrity of investments.
The SEC has a high degree of power to conduct investigations, sue to freeze assets, and is generally authorized to act more quickly than any other governmental enforcement agency. If the SEC determines during or after its investigation that securities fraud was likely committed, it will initiate an enforcement action.
That action could be taken by the Department of Justice (DOJ), and an Assistant US Attorney is generally assigned to the case. One of the fundamental laws in place that provides the investigatory and prosecutorial power to the SEC and the DOJ is known as the Sarbanes-Oxley Act. Sarbanes-Oxley governs these situations in terms of enforcement and penalties.
Sarbanes-Oxley also provides for enhanced sentencing based on the amounts fraudulently obtained and the number of victims, and the statute also provides for enhanced civil enforcement in order to force the convicted defendant to repay his or her victims after the conviction.
The primary Securities Fraud Statute can be found at 18 U.S.C. §1348. The statute’s language is very broad and states that:
A person convicted of Securities Fraud could face up to 25 years in prison, substantial fines, and severe civil sanctions and penalties as well.
If you are facing the possibility of being investigated by the SEC or DOJ, you need to act now to preserve your rights. Contact the criminal defense lawyers at the law firm of Zimmermann Lavine & Zimmermann, P.C. today to schedule an initial consultation.