You probably didn’t even know you were being investigated for a crime, and now you have been arrested and charged with securities fraud. What does that mean, and what should you do about it? Federal defense attorney Danny Izquierdo explains here.
Securities Fraud Is an Umbrella Term for Many Crimes
Facing charges for federal financial crimes, like money laundering and securities fraud, can be scary and confusing. There is a misconception that these crimes always involve millions of dollars and high-powered criminals. The reality is that it doesn’t matter how much or how little money is involved. If you knowingly cheat someone out of money, you could be facing federal charges.
A “security” in this context is any investment vehicle—such as stocks, bonds, options, banknotes, or derivatives. If you knowingly use a phony investment opportunity to cheat someone out of money, you could be charged with securities fraud. Some examples of this crime include:
If you obtain or share non-public information about a company in order to make money on the stock exchange, you could be charged with insider trading.
Duping people into investing in a non-existent company and paying earlier investors with money from newer investors is what’s known as a Ponzi scheme.
Advance fee scams.
Requiring investors to pay an up-front fee or tax and then never delivering on the investment is a form of securities fraud.
High-yield investment fraud.
Promising high rates of return with little up-front investment, particularly when you are not actually investing the money, is a common form of fraud.
There is always risk in investing, and sometimes a legitimate investment vehicle loses investors’ money. That is not fraud—that’s bad luck. However, when someone knowingly defrauds a person who believes they are investing in a legitimate opportunity—that is fraud.
Have You Been Charged With A Federal Crime?