Stock Manipulation Defense
Recently, the former chairman of ForceField Energy, a firm that sells LED lighting, stepped down after being arrested and charged by the SEC for stock manipulation. Richard St-Julien allegedly schemed to inflate ForceField’s share price by making illicit payments to his co-conspirators through a foreign company, who in turn, bought company stocks. Through this activity, trading volume was falsely boosted, and the stock price rose from $4.55 to $7.82 in just over a year.
St-Julien was arrested in Florida as he tried to board a plane bound for Costa Rica, where he resides, and was charged by federal prosecutors in Brooklyn, New York, for securities fraud conspiracy. After the news of his arrest broke, St-Julien stepped down from his position as chairman, and the company’s stock fell 22 percent before being frozen. If he is convicted in federal court, St-Julien faces a maximum of 25 years in prison.
Federal Securities Prosecution
The federal Securities Exchange Act contains many mechanism to prosecute fraud in its many forms. One of the primary rules that is used to combat fraud is found in section 10(b), often used in conjunction with the corresponding SEC agency Rule 10b-5. These rules contain broad antifraud language, which is often used as a catch-all allegation. Section 10(b) is used to bring charges against companies and related individuals for insider trading, price fixing, bogus company sales, and failing to communicate relevant information to investors. Any behavior that involves fraudulently inflating or depressing stock prices, such as the scheme allegedly perpetrated by St-Julien, will fall squarely under 10(b).
Section 10(b) provides that it is unlawful for any person to use or employ, in connection with the purchase or sale of any qualified security (such as a stock or bond), any manipulative or deceptive device or contrivance that violates the SEC rules. The SEC promulgates extensive rules to protect investors and the public in general.
Effective Defense in Securities Fraud Cases
In many securities fraud cases, individuals are targeted for investigation long before an arrest is made. Government agencies and their investigators can spend months or even years gathering evidence for a case before they file formal charges. Often, the outcome of a case can be impacted by getting effective counsel involved as soon as you suspect that you might be under investigation.
The team at Jeffrey S. Weiner, P.A. will work diligently and quickly to get control over your case. We have years of experience negotiating with prosecutors to prevent charges from being filed in the first place, or to reduce the severity of the looming charges. An arrest or conviction for a white collar crime can throw your career into jeopardy, in addition to leading to large fines and lengthy prison sentences. If you have been contacted by federal investigators about securities fraud or any other white collar crime, contact a defense attorney immediately. The law office of Jeffrey S. Weiner. P.A. in Miami can provide advice and representation. Contact us for a consultation today at 305-670-9919.