Securities Fraud - 18 USC § 1348
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What Is New York Securities Fraud?
New York Securities Fraud Attorney – Lebedin Kofman LLP – NY Securities and Investment Fraud Lawyers – Securities Fraud Lawyer
Under 18 USC §1348, anyone who knowingly executes a scheme to defraud any person in connection with any security or obtains by false or fraudulent means any money or property related to the purchase or sale of any security shall be guilty of securities fraud.
The federal government is the primary governmental authority responsible for prosecuting securities fraud. The Securities and Exchange Commission (SEC) is the central agency responsible for securities fraud crimes. The agency has five commissioners who are appointed by the President of the United States. The agency enforces federal securities laws, proposes securities rules, and regulates the securities industry. The two main federal laws under which securities fraud cases are prosecuted are the Securities Act of 1933 and the Securities Exchange Act of 1934.
New York lawyer for securities fraud Russ Kofman and his team of New York attorneys at Lebedin Kofman LLP may be able to help you if you are facing fraud charges. Our New York criminal defense attorneys have years of experience dealing with securities fraud and other fraud cases.
New York Fraud Attorney Explains The Martin Act
The Martin Act, enacted in 1921, is a law utilized by New York prosecutors to combat different forms of financial and securities fraud. Its expansive authority enables local and state prosecutors to investigate and prosecute fraudulent practices related to the sale, purchase, or offer of securities and commodities within or from New York. This law is interpreted liberally and serves as a remedial measure, allowing prosecutors to use a broad range of enforcement tools like subpoenas and search warrants to investigate fraudulent practices.
Apart from investigative powers, the Martin Act also grants prosecutors the ability to initiate civil proceedings for injunctive relief or restitution and take investigative testimony before charges are filed. If evidence of a law violation exists, prosecutors can bring criminal charges and seek to recover funds through civil proceedings from defendants charged with violating the Martin Act.
Violations of the Martin Act can be charged for various offenses, such as making false statements or using deceptive tactics to induce or promote securities transactions, promising unreasonable financial gain, and knowingly or recklessly making misleading statements. The Martin Act empowers prosecutors with the flexibility to seek a range of punishments and sentences for violations. Misdemeanor violations can result in a maximum sentence of one year in jail, while class E felony violations can be punished with up to four years in prison.
A skilled lawyer for fraud cases in New York may be able to assist you if you are facing securities or investment fraud cases. At Lebedin Kofman LLP, our team of criminal defense lawyers has years of experience handling criminal cases and fraud cases. We may be able to help you fight for your rights and your freedom in New York. Contact our law firm today to speak with a skilled criminal attorney about your case.
Other Laws Relating To Securities Fraud In New York
Eight federal laws have been established to regulate and govern the securities sector.
These laws include:
- The 1933 Securities Act: requires that all public companies disclose financial information and other significant details to investors regularly. It also prohibits fraud in securities sales.
- The 1934 Securities Act: gives the Securities and Exchange Commission power over the securities market, which includes oversight of brokerage companies and the registration of securities-selling businesses. The 1938 Trust Indenture Act: requires that a formal agreement be made between bond issuers and bondholders, and conforms to its criteria.
- The 1940 Investment Advisers Act: Solo practitioners or firms must comply with certain regulations in order to provide advice about security investment. One of these requirements is registration with the Securities and Exchange Commission.
- The 1940 Investment Company Act: regulates mutual funds as well as other companies that trade or invest in securities. They also offer securities to the public for purchase. To ensure that investors have adequate information about fund structure and investment objectives as well as financial standing, the Act mandates companies to disclose investment policies to them.
- 2002 Sarbanes Oxley Act: Requires financial disclosures to be more transparent. To enforce tighter oversight over auditors, the Public Company Accounting Oversight Board was established.
- Dodd-Frank Consumer Protection Act 2010: This Act establishes greater transparency and accountability in corporate governance and imposes trading restrictions and new disclosure requirements.
- 2012 Jumpstart Our Business Startups Act: This Act reduces regulatory burdens to allow businesses to access public capital markets.
Due to the wide interpretations of Section 10B-5 and Rule 10B-5 of the 1934 Securities Act, investors can sue brokers and companies as well as other financial professionals and individuals who cause financial harm. The anti-fraud section of Section 10B applies to insider trading and market manipulation cases.
Rule 10B-5 bans any “device or scheme to defraud” and any misstatement or omission of information that would be significant to investors in making a decision about whether purchasing or selling a stock can lead to liability. Investors who are financially harmed by a broker handling their money are protected under these regulations.
At Lebedin Kofman LLP, New York fraud attorney Russ Kofman and securities fraud lawyer Arthur Lebedin, along with our top-rated team of New York lawyers have years of experience dealing with securities fraud law. Our team of fraud attorneys is committed to providing top-notch legal representation for individuals and businesses facing securities fraud charges. Contact us today to arrange a consultation and learn how our New York attorneys can assist you with defending against securities fraud allegations.
NY Attorneys For Investment Fraud Explains Types Of Securities Fraud Offenses
Securities fraud usually occurs when an individual makes a false statement about a company or the value of its stock causing others to make financial decisions based on the false information.
There are several forms of securities fraud:
- The first type of securities fraud is securities fraud committed by a company. This occurs when an officer or director of a corporation does not accurately report the company’s financial information to its shareholders. This misinformation may artificially raise the worth of the company and encourage investors to buy shares of an unhealthy company. If the company declares bankruptcy, these investors will lose their investments because of the misinformation provided by the corporation.
- The second type of securities fraud is insider trading. This occurs when an individual uses confidential financial information about a company to make decisions about whether to buy or sell the stock before the information is disclosed to the public.
- The third type of securities fraud is third-party misrepresentation. This occurs when a third party provides false information about the stock market or a particular company or industry.
For a successful conviction, the prosecution must prove beyond a reasonable doubt that:
- The defendant willfully engaged in any act, practice, or course of business that operates or would operate as a fraud or deceit upon any person, including making an untrue statement;
- The defendant’s acts must be undertaken in connection with a securities transaction;
- The defendant must directly or indirectly use the security in connection with the scheme to defraud; and
- The defendant acted knowingly.
To prove securities fraud, the prosecution must demonstrate that the defendant willfully engaged in deceptive conduct in connection to a securities transaction, used the security in connection with the scheme to defraud, and acted knowingly. If you or someone you know is facing charges related to securities fraud, it’s important to seek the advice of an experienced investment fraud attorney who can provide guidance and build a strong defense strategy for your case.
Lebedin Kofman’s top-rated investment fraud lawyers may be able to provide the legal representation you need to get a favorable outcome for your fraud charge or case. Attorney Russ Kofman and NY fraud lawyer Arthur Lebedin, along with our team of attorneys, have years of experience in helping our clients face fraud charges and representing their best interests.
Common Types Of Securities Fraud Claims
Federal and state laws can apply to securities fraud cases in Manhattan. However, most of these claims can be resolved by private arbitration instead of the judicial system.
Though there exist various forms of securities fraud, investors are likely to encounter the following common types of fraud and negligence:
- Churning: Excessive trading by a broker to obtain commissions, outside the client’s financial needs, resources, or investment objectives.
- Unauthorized Trading: A broker cannot execute a trade without prior approval, except for certain exceptions like margin accounts. Unauthorized trading may result in liability for the broker.
Frontrunning: Happens when a broker delays a customer’s order to purchase personal shares of the stock, then selling at a higher price once the client’s transaction is executed. - Unsuitability: Unsuitability claims may involve a lack of diversification or over-concentration of investments in a single industry or product. Elderly or ill investors may be common victims of investment unsuitability.
- Price and Market Manipulation: Impacting a security’s price by means outside the free-market system, such as inducing others to buy or sell a security or limiting the number of shares available.
- Malfeasance: Unethical and potentially criminal behaviors by a broker or firm, such as embezzlement, insider trading, and Ponzi schemes.
If you have been charged with any of these types of fraud, it is important to seek the advice of a skilled New York fraud lawyer who can guide you through the process of facing your charges. Our team of New York attorneys for criminal defense at Lebedin Kofman LLP may be able to provide the legal advice you need if you are facing allegations of New York securities fraud.
What Are The Penalties For Securities Fraud In New York?
A conviction under 18 USC §1348 can have serious consequences. Securities fraud is punishable by up to 25 years in prison. Additionally, securities fraud can involve very high fines depending on the circumstances of the case. Usually, the fines will amount to approximately $250,000, but in certain cases, fines of up to $5 million may be issued. Probation is also a possible penalty for securities fraud, especially when the instance of fraud did not result in any financial loss. Restitution may also be ordered when securities fraud involves investors, employees, clients, or others who suffered monetary loss as a result of the fraud.
Speak To The Skilled New York Attorneys For Securities Fraud At Lebedin Kofman LLP
If a person is charged with securities fraud, it is crucial for them to promptly retain the services of criminal defense attorneys who are experienced in handling cases of fraud. A skilled lawyer may be able to help you protect your rights and your freedom as you face fraud charges.
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