Experienced Securities Fraud Defense

In San Antonio & across Texas the media often covers security fraud cases, especially those relating to Wallstreet, a "hot" topic. Many newspapers and magazines clamor to report stories of a single person or group of people being swindled by an investment scheme, insider trading & in many cases misleading statements and financial reporting from a victim. Because this type of fraud has received so much press, judges and juries are cracking down on the perpetrators of such crimes, and those found guilty of such investment fraud are usually given heavier sentences than ever before.

Contact me, a San Antonio criminal attorney by telephone, email, or fax today and a I will be in touch with you shortly to set up a no-obligation face to face consultation. Remember - securities fraud is a serious charge; you deserve the best San Antonio criminal lawyer available

Whoever knowingly executes, or attempts to execute, a scheme or artifice—

(1) to defraud any person in connection with any commodity for future delivery, or any option on a commodity for future delivery, or any security of an issuer with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l) or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o (d)); or
(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any money or property in connection with the purchase or sale of any commodity for future delivery, or any option on a commodity for future delivery, or any security of an issuer with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l) or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o (d));

shall be fined under this title, or imprisoned not more than 25 years, or both.

Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws.

Generally speaking, securities fraud consists of deceptive practices in the stock and commodity markets, and occurs when investors are enticed to part with their money based on untrue statements.[1]

Securities fraud includes outright theft from investors and misstatements on a public company's financial reports. The term also encompasses a wide range of other actions, including insider trading, front running and other illegal acts on the trading floor of a stock or commodity exchange.[2][3]

According to the FBI, securities fraud includes false information on a company's financial statement and Securities and Exchange Commission (SEC) filings; lying to corporate auditors; insider trading; stock manipulation schemes, and embezzlement by stockbrokers.[4

The subject of “Penalties and Sanctions for Securities Fraud” is attracting considerable attention and controversy in the aftermath of Sarbanes-Oxley and the dramatic increases in monetary sanctions that have occurred in recent years. There has been considerable interest in the use of corporate vs. individual penalties as well as the magnitude of monetary sanctions.

Indemnification of Executives

An important facet of regulatory penalties and the cost of private lawsuits against executives is that in many cases these amounts are paid by their employer. I will focus this next section on the case when indemnification is part of the manager’s labor contract, whether or not the employee has been terminated. Of course, the firm also can decide to indemnify an employee ex post without an explicit ex ante contract because of the ongoing value of retaining the employee’s services.

Indemnification raises a number of interesting questions about the reaction of regulators to indemnification of the employee (or former employee) by the firm. While my own views about this specific issue are not sharply formed, I do think that it is helpful to view the issue of indemnification, like many others, from the perspective of economic theory. Indeed, this seems particularly appropriate, since the statutory framework itself, under which the SEC sets penalties, permits considerable latitude in that it allows the Commission to consider the best interests of public policy.

The 1991 Federal Sentencing Guidelines for Organizations (Guidelines) has changed all that. The Guidelines were Congress' reaction to the public perception that government mishandled the S & L crisis and scandals with BCCI and the securities industry. U.S. District Judge Marvin Aspen of the Northern District of Illinois stated, "the Guidelines are a reaction to a natural frustration with the criminal justice system. There was a feeling that federal judges were not giving long enough sentences to white-collar criminals and were not imposing large enough fines."

Now, there are few boards of directors, corporate counsels, and senior managers who have not heard of the Federal Sentencing Commission; and most of them are scurrying to know more. The Guidelines, which apply to almost all types of organizations (including, for example, corporations, partnerships, political subdivisions, unions, not-for-profit organizations, and trusts), codified specific rules that cover all manner of business and white-collar crimes, specifically targeting antitrust violations, bid rigging, securities violations, price fixing, bribery, environmental violations, embezzlement, mail fraud, and numerous others. One federal prosecutor has said that organizations that are ignoring the Guidelines will come around "as soon as we have our first public hanging."

Keeping Legal Services Within Your Reach

I offer a free initial consultation on any criminal or municipal defense matter. If you are facing charges or an investigation, or there is a warrant out for your arrest, you can come to me to discuss your concerns with no further obligation. Call now at (210) 225-6600.

 

Articles

Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for 'lorem ipsum' will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes.