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What is Securities Fraud?


Stealing from or deceiving investors is known as securities fraud and can be charged as a felony offense. Unfortunately, it is not uncommon for those who work in stocks and investing to be unfairly accused of securities fraud, which can have devastating consequence, so if you have been charged with this offense, it is important to contact an experienced white collar crime attorney who may be able to get your charges reduced or even dismissed.

Corporate Fraud  

In most cases, securities fraud charges involve allegations that a person has made a false statement about a company or the value of its stock and that investors made financial decisions based on that false information. There are also a number of different types of securities fraud, the first of which involves an officer or director of a company who doesn’t accurately report the business’s financial information to shareholders, which can have the result of artificially raising the financial worth of a company’s stock and encouraging investors to buy shares when they normally wouldn’t. For example, a corporate officer who fails to report a company’s expenses, which in turn, makes its profits appear larger than they actually are could be charged with securities fraud.

Insider Trading 

Another common type of securities fraud is referred to as insider trading, which is usually committed by employees who use confidential information about a company’s financial state to make decisions about whether to buy or sell stock. When this same information is not available to the public, an employee could be charged with securities fraud.

Third Party Misrepresentation  

The final major type of securities fraud is third party misrepresentation. This involves a third party giving false information about a company, industry, or the stock market. Pump and dump schemes, for example, are one of the most common types of third party misrepresentation offenses, in which a person finds a small, relatively unknown company with low cost stocks and then buys a high number of shares. With a pump and dump scheme, the purchaser is then accused of sending out false information about the business in order to encourage others to purchase shares, which in turn, drives up the price of those stocks. Once the price increases enough, the purchaser then sells the shares for a profit.

Obtaining stock-related information directly from a company itself, rather than from a third party, and then double checking that information with the data posted on the SEC’s website is one of the best ways to avoid accusations of insider trading or third party misrepresentation. Unfortunately, even those who take these steps are accused of securities fraud at an alarming rate.

Call Today for Legal Advice  

If you have been accused of securities fraud, you need the advice of a dedicated lawyer. Please call experienced white collar crime attorney Jeffrey S. Weiner, P.A. about your own pending charges today. You can reach a member of our legal team by calling 305-670-9919 or by completing one of our brief online contact forms.


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Miami Criminal Attorneys

9130 South Dadeland Blvd
Miami, Florida 33156

Telephone: 305-670-9919
Fax: 305-670-9299

Miami Abogado Criminal Jeffrey S. Weiner website - Delitos de Negocios, Delitos de Drogas y Apelaciones

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