Securities fraud (also known as investment fraud or stock fraud) includes everything from intentional theft to gross negligence in the management of client funds. A variety of laws and regulations have been implemented to prevent the mismanagement and deliberate misuse of investor assets. Anyone suspected of or charged with securities fraud will require the assistance of an experienced Houston-area stock fraud lawyer.
Types of Securities Fraud
It is illegal for a stockbroker to steal funds from investors or otherwise invest clients’ assets in highly irregular schemes or financial instruments. Stockbrokers are legally required to act in the best interests of investors and in accordance with accepted professional standards. Specifically, brokers are expected to demonstrate trust and reliance when providing investment advice and acting on behalf of clientele. Among the questionable practices that may invite a federal investigation for fraudulent acts are the following:
- Ponzi and advance fee schemes
- Commodities schemes and fraud
- Insider trading and embezzlement
- Internet and mail fraud
- Unauthorized trades
- “Pump and dump” schemes
- Real estate fraud
Penalties for Investment Fraud
Stockbrokers and registered agents may be held accountable for gross negligence in the management of client funds. Brokerage firms are also subject to criminal penalties if they fail to implement sufficient procedures to safeguard the financial assets and goals of their clientele. The following is a partial list of the harsh penalties that may result from a fraud conviction:
- 10 years in prison for purposely destroying audit records
- 20 years in prison for obstructing a federal investigation
- 20 years in prison for providing false financial information during an investigation by the U.S. Securities and Exchange Commmission
- 25 years in prison for investment fraud by a public company
Contact a Securities Fraud Attorney in Houston
Financial fraud investigations can be quite lengthy and extremely stressful because the securities regulatory system is incredibly complicated and constantly changing. In addition, government investigators and prosecutors are well-prepared and armed with overwhelming resources. As expected, it can be extremely difficult for defendants to understand their legal rights and the best available means of fighting a securities fraud charge in court. When the liberty of a stockbroker or financial professional is placed in jeopardy due to an investment fraud charge or investigation, it’s time to retain an experienced Houston-area securities fraud lawyer.
An accusation of stock fraud is always a serious matter. James Alston specializes in the defense of individuals who have been charged with securities fraud. If you need help, pick up the phone and speak to the Law Office of James Alston today.
Get your questions answered - call me for your free telephone consultation at (713) 228-1400