San Francisco, CA Securities Fraud Lawyer
There are many types of fraud that can result in federal charges, including wire fraud and mail fraud. One of the most serious charges of fraud one can face is securities fraud. While California and other states do have security fraud laws on the books, the majority of crimes are handled under federal statutes. If you are being investigated or have already been charged, you need to contact a securities fraud lawyer in San Francisco, CA to help defend you against these allegations.
What Is Securities Fraud?
Security fraud is considered a white-collar crime. Securities refer to different types of investments, including banknotes, corporate stocks, investment contracts, and municipal bonds. Security fraud occurs when one party cheats, deceives, lies, or steals another party for financial gain using one or more securities.
There are several types of securities fraud that can be charged:
- Churning: This type of securities fraud occurs when a broker pressures a person to invest excessively into one security in order for the broker to earn more from the commission and fees associated with those investments.
- Insider trading: This type of securities fraud occurs when a party associated with a securities company (i.e., stock market investment company) shares information that is not available to the public. Under the law, if the information is not available to the public then no one in the company is allowed to leak that information to anyone.
- Misrepresentation: As a San Francisco, CA securities fraud lawyer can explain, this type of securities fraud is the opposite of insider trading. It occurs when a broker or other trusted individual lies about how a security is predicted to perform in order to increase the sale of the stock.
What Are the Penalties for Securities Fraud?
Securities fraud is a crime in which laws set to protect investors and securities traders are violated. Perpetrators of securities fraud may include stockbrokers, analysts, brokerage firms, corporations, investment banks, and private investors. For example, an analyst at a brokerage firm may give a stock a favorable rating in order to secure the company’s investment banking business, despite knowing that the stock is not a smart buy for investors. In another example, a private investor may commit securities fraud by acting on inside information.
Federal investigators do not take crimes of security fraud lightly and are aggressive when it comes to prosecution. If a person is convicted of securities fraud, they face up to five years in a federal prison. They can also be fined between $10,000 and $5 million. Any sentence will also likely include full restitution to any and all victims of the fraud. Under federal law, those victims may also file a civil lawsuit against the convicted party for damages above and beyond the actual money stolen in the fraud.
A conviction for securities fraud can involve significant penalties for anyone involved. Securities fraud can be punished both with civil penalties, such as fines or license restriction, as well as criminal penalties, such as fines and prison.
- Fines: Securities fraud can involve very high fines, though the amount of fine will depend upon the circumstances of the case. In some situations, such as in cases of insider trading, fines of up to $5 million are possible, while fines for other types of securities fraud can be $10,000 or more.
- Incarceration: A conviction for securities fraud can also result in a prison sentence. Any conviction for a federal securities fraud crime can result in a 5-year federal prison sentence per offense.
- Probation: Probation is also a possible penalty for securities fraud, especially when there is only a single instance of fraud or it involves offenses which didn’t result in any financial loss. Probation usually lasts several years, though terms of 5 years or more are possible. While on probation, the probationer must regularly meet with a probation monitor and comply with any conditions imposed by the court, such as not committing more crimes, submitting to drug testing, and paying all fines and restitution.
- Restitution: Because securities fraud often involves investors, employees, clients, or others who suffer monetary loss as a result of the fraud, courts make restitution part of the sentence. When ordered to pay restitution, a person convicted of securities fraud must repay the money lost as a result of the fraudulent activity. The restitution must be paid in addition to any fines.
Are You Being Investigated?
If you are being investigated for securities fraud, or you have already been charged, you need to retain the services of an aggressive and skilled securities fraud lawyer in San Francisco, CA right away. The sooner a lawyer can begin building your defense, the better your chances are for a more positive outcome. Contact Morales Law Firm today to schedule a free and confidential consultation to find out how we can help.
Seek Legal Help
Securities fraud is a crime that typically involves complicated facts and extensive government investigations, and one that can lead to lengthy jail sentences and stiff fines if you are convicted. Being convicted of securities fraud can also ruin your career and permanently change the direction of your life. Anytime you’re facing a securities fraud charge, or are being investigated for this crime, you need to speak to a securities fraud lawyer San Francisco, CA as soon as possible, and always before you make any statements to the police or investigators. An experienced securities fraud lawyer San Francisco, CA will be able to evaluate any case against you and provide you legal advice based on the law and knowledge of the prosecutors, courts, and complicated regulations surrounding securities transactions. You need to speak to our securities fraud lawyer San Francisco, CA securities fraud lawyer San Francisco, CA immediately upon learning you are suspected of, or charged with, any securities fraud crime.
Who Commits Securities Fraud?
Securities fraud is usually committed by one of three parties:
- Private investors acting on inside information
- Corporations falsifying or hiding information
- Analysts, financial advisors or broker-dealers who intentionally provide bad advice or advice based on insider information
What Are the Warning Signs of Securities Fraud?
There are several common signs of securities fraud:
- Offer sounds too good to be true
- Investment offer was not solicited by you
- Seller employing high-pressure tactics
- Seller asking for personal information over the internet or phone
- Seller guaranteeing results
- Seller does not provide information about the offer
If you spot one of these signs, contact a securities fraud lawyer in San Francisco, CA. The team at The Morales Law Firm may be able to help you.
What Can I Do To Avoid Fraud?
There are several actions you can take to avoid securities fraud:
- Research the claims of the seller
- Check with state and federal regulators for complaints against the company
- Ask for proof that solicitors are who they claim to be
- Ask the people promoting the investment opportunity how much they are getting paid to do so
- Ask for written information that proves the seller’s claims, such as an annual report, prospectus, financial statements or offering circular
- Obtain a written copy of all offers and save a copy for your records
- Have a trusted broker, attorney or financial advisor review any investments before you make them
If you suspect fraud has already occurred, contact a securities fraud lawyer in San Francisco, CA.
How Can I Report Securities Fraud?
You can file a complaint with the Securities and Exchange Commission, local law enforcement or state securities regulator. Report the claim as soon as possible. If you have been the victim of securities fraud, contact a securities fraud lawyer in San Francisco, CA. The team at The Morales Law Firm may be able to help you.
Which Actions Are Considered Securities Fraud?
Securities fraud applies to several activities that involve manipulating the market or deceiving investors:
- Manipulating the market value of investments
- Ponzi schemes
- Misrepresentation of facts
- Unauthorized trading, including account churning
- Dissemination of false account statements
- Misappropriate of funds
What Is an SEC Whistleblower?
An SEC whistleblower is a person who furnishes the SEC with timely, credible and original information about a violation of securities laws. Whistleblowers may receive a reward of up to 30% if monetary sanctions that result from their actions are over $1 million and the money is collected as a result of legal actions by the SEC and other agencies.
Clearing Your Name with a Securities Fraud Lawyer
A securities fraud lawyer in San Francisco, California can help you if you’re under investigation, so you should reach out to The Morales Law Firm as soon as possible. You don’t want to end up on the news for something you had nothing to do with: Securities fraud can be committed by individuals or companies, and if you were just an employee on the sidelines of a company that had some less-than-ethical practices, you shouldn’t be punished.
It’s easy to feel overwhelmed if you’re under investigation for securities fraud, but you should remember that you haven’t been convicted yet, and your trusted legal team can help you navigate the rocky road to come. Securities fraud comes in many shapes and sizes, and it’s important to learn more about some notable cases so you understand what’s at stake, and what you could be tried for.
Bernie Madoff and Securities Fraud
Bernie Madoff made the news for operating the largest Ponzi scheme in history. He was eventually thrown in prison for defrauding thousands of investors out of billions of dollars. Madoff died in 2021, but his legacy as one of the most reviled securities fraudsters still stands. But how did his scheme operate, and what should you learn about his case?
A Ponzi scheme is a type of securities fraud in which investors are lured in by promises of insanely high returns on their investments within an insanely short period of time. However, instead of investing money legitimately, the operator of the Ponzi scheme simply takes money from other investors to pay victims in the scheme their “returns”.
Madoff had already established his name in the financial sector, and he only promised investors moderately high returns. Because of this, he was easily able to rope in investors – but instead of investing their money as he had promised, he just put all of their money in a bank account. Over time he would take money out of this bank account to pay back investors who wanted out, making it seem like they were actually making a legitimate profit even though their returns were basically just the money from later investors that had been added to the bank account.
Of course, when the 2008 financial crisis came rolling around, all of Madoff’s investors suddenly wanted out – and he wasn’t able to pay everyone, so eventually the scheme came to light. Long story short, Madoff’s name went down in history as one of the most notorious securities fraudsters in the world. Billions were lost, one of his sons committed suicide, and he ended up dying in prison a decade later.
Learning about Madoff gives you a better idea of how securities fraud is punished, but also how securities fraud is discovered. It involves massive amounts of money, and it requires as much legal horsepower as you can get if you want to get any charges reduced or dropped. Fortunately, a securities fraud lawyer in San Francisco, CA can give you all the help you need if you know you’re not a Madoff.
Contact the Morales Law Firm Today
It’s easy for people to vilify securities fraudsters. They don’t get a good rap in the news, and with fraudsters like Madoff as an example, they usually attract the full wrath of the law when they’ve been discovered.
At The Morales Law Firm, we know that there’s more to reality than what we see in the headlines. We know that behind every case is a real person, and we know our clients shouldn’t be compared to notorious criminals if they haven’t been found guilty. If you’re being investigated for securities fraud, you don’t deserve to have your name dragged through the mud. You’re not a Madoff, and you have a future worth protecting. Reach out to a securities fraud lawyer in San Francisco, CA today, and see how The Morales Law Firm can help.
Benefits of Hiring a Security Fraud Lawyer
Getting charged with security fraud can be a scary and nerve-wracking ordeal. If you get convicted of this crime, you may face harsh fines, like heavy fines, asset forfeiture and prison time. Here are a few benefits of having a securities fraud lawyer in San Francisco, CA on your side.
- Preserve evidence: If you have been charged with security fraud, the prosecution likely has evidence against you. To have a shot at beating your charge, you will need to have evidence of your own. That’s one good reason to work with an experienced lawyer. He or she can help you preserve evidence to build a strong defense.
- Provide protection from the police: After you’ve been charged with security fraud, the police may likely want to talk to you about your case. If you’re innocent, you might think that you can offer an explanation and clear your name. However, you must understand that the police aren’t there to help you. They’re only there to gather information to use against you. Therefore, you shouldn’t communicate with the police without your lawyer present.
- Give you legal guidance: Going through the legal process on your own can be confusing and intimidating. You don’t know what to expect and whether you’re making the right decisions or not. That’s another good reason to have an experienced lawyer on your side. He or she can thoroughly examine your case and provide you with sound legal advice. For example, if there is a lot of evidence against you, your lawyer may advise you to take a plea deal rather than going to trial.
- Represent you in court: When you’re charged with security fraud, you will be required to go to multiple court hearings. This can be quite intimidating. However, if you have a skilled lawyer standing next to you, it will be much easier. Your lawyer will prepare you for these court dates and coach you on what to say.
- Save time: Dealing with a security fraud is very stressful, so you naturally want to get through the legal process as quickly as possible. An experienced lawyer can streamline the process for you and help you get on with your life faster. He or she knows the ins and outs of the legal system and will handle all the legwork for you.
About Securities Fraud
Of all the crimes that are defined as fraud, securities fraud is one of the most serious. Also known as “investor fraud” or “stock fraud,” securities fraud generally involves misleading or lying to investors about the value or potential of a given investment for personal gain. Because these cases are prosecuted at the federal level, you will need to have a skilled securities fraud lawyer on your side should you be charged. Even if you face conviction or have been convicted already, an attorney from the Morales Law Firm may be able to obtain a reduced sentence, and possibly get your record expunged afterward. This is important because a conviction of securities fraud on your record means any licenses you have will be suspended or revoked, and you may never work in finance again.
What Constitutes Securities Fraud?
The FBI defines securities fraud as any criminal act in which the actor misrepresents information about an investment, such as a stock, real estate or foreign currency, engages in market manipulation, or acts on confidential information. There are a number of ways in which securities fraud is committed:
- Advance fee: the perpetrator convinces the victim to pay money upfront in order to get in on the latest “hot investment,” promising high returns that never materialize
- High yield investment: misrepresenting an investment by promising large returns with little or no risk
- Insider trading: Trading stocks or other securities based on company data, privileged reports or other information not available to the general public
- Ponzi scheme: Also known as a “pyramid” scheme, this involves paying those in on an investment at the beginning with paid in by those who come in later
- “Pump and dump“: The perpetrator spreads rumors about a security or other investment, exaggerating its potential, driving up the price, then selling it off
The danger of being accused of fraud is why many investment firms add a disclaimer on their ads and announcements, informing potential investors that any investment carries the risk of loss.
Criminal Penalties May Only Be the Beginning
Another reason to have a good securities fraud lawyer in San Francisco, CA in your corner: in addition to criminal charges, someone accused of securities fraud may very well face civil liability when defrauded investors file lawsuits.
Besides all of that, a person convicted of securities fraud will find it very difficult to find employment, particularly in positions requiring trust. There is also the stigma: with trust in the financial system eroding and antipathy toward Wall Street growing every day, a securities fraud conviction will make you persona non grata for a very long time.
Why You Shouldn’t Talk to the Police When Charged with Securities Fraud
If you have been charged with securities fraud, you may wonder if you should talk to the police or not. Even if you believe you are innocent of the crime, a securities fraud lawyer in San Francisco, CA would advise against talking to the police. Here are a few reasons why speaking to the police can make your situation a lot worse.
- Talking to the police will not help you. When you are brought in on charges for securities fraud, the police may tell you that they can help you. They may even tell you that they will go easier on you if you confess. However, you should not believe them. Police don’t actually have the authority to reduce or drop your charges. Even if you try to explain why you are innocent of securities fraud, it will not do you any good.
- You may accidentally say the wrong thing. You may be completely innocent of committing securities fraud. However, you may get nervous talking to the police and accidentally say the wrong thing. For example, if you are accused of committing a pyramid scheme with several other people, you might tell the police that you did not do it. However, you might mention that you were in business with these individuals. This might lead the police to believe that you did commit the crime.
- Police might not remember your statement accurately. If you speak to the police, there is no guarantee that they will remember everything you said accurately. They may also take something you said out of context and make you seem guilty. While you are able to tell a jury that the police misconstrued your statement, they may not believe you and assume the police officer was telling the truth.
- Confessing immediately can lead to harsher penalties. If you are in fact guilty of securities fraud, you may think that confessing early on will make things easier for you. However, the opposite is more likely to occur. If you confess to the crime when the police first question you, the prosecuting attorney will likely give you the harshest punishment. It’s a much wiser move to stay silent and allow your lawyer time to work out a favorable plea deal.
Getting help from a securities fraud at the Morales Law Firm can mitigate much of the damage to your career and reputation, or at least minimize the penalties — but only if you act quickly. Legal problems are like medical conditions; the longer they are ignored, the worse they become. If you are facing charges or a conviction of securities fraud, call to arrange an appointment at the earliest opportunity.
Securities Fraud Lawyer San Francisco, CA
If you have been on the receiving end of securities fraud then you know that a securities fraud lawyer in San Francisco, CA can be the difference between getting your money back and swimming in a river of debt. While you may not be able to get everything back to the way it was, it is worth trying to right the wrong that has been done.
People who are committing fraud are going to go after where the money is and that means targeting older Americans who are college-educated, optimistic, and self-reliant. They are going to target those who have money and are looking to invest to keep their retirement plans.
Red Flags of Fraud
There are ways you can stay out of fraud though. There are red flags that are almost a dead giveaway that something isn’t right. The biggest advice to give though is to trust your gut. If it feels too good to be true, then it probably is. Here are some of the most common red flags to look out for when someone is pitching you a scam:
- Guarantees: If someone is going to guarantee that an investment will perform a certain way then it is clear they are scamming you. All investments carry some degree of risk, be that not being able to do what is stated, to not being able to carry through the pitch.
- Unregistered Products: Many investment scams involve unlicensed people selling unregistered securities. This could be stocks, bonds, notes, hedge funds, oil or gas deals, or even things such as prime bank investments.
- Overly Consistent Returns: Any investment that constantly goes up month after month or there are remarkably steady returns regardless of market conditions should raise your suspensions. Even the most stable investments can experience ups and downs from time to time. If it is always positive then you should be wary.
- Complex Strategies: If there is a highly complex investing technique for unusual success then be wary. Legitimate professions should be able to explain what they are doing clearly and make it easy to understand the risks. Before you invest in anything you should understand what is going on and understand the risks.
- Missing Documentation: If someone is trying to sell you a security with no documentation then he and she may be selling unregistered securities. If there is no prospectus in the case of stock or mutual fund and no offer of circular in the case of a bond then it is a red flag and something to avoid. This is also true with stocks without stock symbols.
- Account Discrepancies: If there are unauthorized trades, missing funds, or other problems with your account statements they could indicate churning or fraud. Always keep an eye on your account statements to make sure your activity is consistent with your instructions and what you are investing in. While there is a chance of it being a genuine error, always question these things. Your money is important and it is important to know what is happening in your accounts.
- Pushy Salesperson: No reputable investment processional will push you to make an immediate decision about an investment or tell you that you have to act now. If they are pushing you to make a stock sale or purchase then steer clear. Even if not fraud is happening, this type of pressure is inappropriate.
How Bad Advice Gets Financial Professionals in Trouble
A financial professional’s highest duty is to his or her clients. Under the law, an investment adviser must recommend only those investments that are in line with the client’s financial goals and risk tolerance, based on accurate information. Doing otherwise means possible charges of securities fraud. Depending on the circumstances, a securities fraud lawyer in San Francisco, CA may be able to overcome such charges, or at least mitigate the damage by obtaining a reduced sentence.
Misrepresentation of facts, whatever the motive, is a crime and not worth the consequences to the perpetrator or the victims. One egregious example was the recent Puerto Rican bond scandal.
How UBS Puerto Rico Made a Bad Thing Worse
The U.S. Territory of Puerto Rico has been struggling for decades due to mismanagement, dependency on the federal government, and plain bad luck. In 2013, the territorial government decided to double down on borrowing, issuing $70 billion in municipal bonds. Given the realities of Puerto Rico’s economic situation, investing in such a fund was risky at best. Instead, UBS Puerto Rico representatives urged their clients to put their money into funds that were undiversified and, as closed-end funds, not redeemable for cash. Furthermore, shares in these funds were heavily leveraged, in some cases as much as 100 percent (this practice was a large contributing factor to the Stock Market Crash of 1929.)
Why was UBS, a global institution with trillions of dollars in assets, doing this?
After the scheme came unraveled and hundreds of people lost their retirement and life savings, it came out that a supervisor had been threatening his subordinates with termination if they did not sell these municipal bond funds to their clients to generate commissions.
Wells Fargo Employees Pressured as Well
Another situation that might have involved a securities fraud lawyer in San Francisco, CA developed a few years ago when customers of Wells Fargo found themselves being charged with fees for accounts they had not opened. This was yet another case in which employees were being pressured by management to generate revenue for the bank.
Both these stories raise the question: if employees at these institutions were under duress, were they guilty of securities fraud? The answer is yes. The takeaway here is that if you as a stockbroker or investment adviser are pressured to do something illegal, contact a securities fraud lawyer in San Francisco, CA; instead of going to prison, you may have grounds for a whistleblower lawsuit.