Securities Fraud

When “junk bond” king Michael Milken pled guilty to securities fraud in 1990, he received a 10-year sentence but served only 22 months. Today, federal authorities (mainly the FBI and the Securities and Exchange Commission (SEC)) are much more aggressive in prosecuting securities fraud, and the sentences meted out tend to be far more substantial, particularly in light of the Sarbanes-Oxley Act of 2002.

What is a Security?

The term “security” is very broad. It encompasses not only things traditionally considered securities, such as shares of stock in publicly traded corporations, but any investment of money in an enterprise with an expectation of profit from the efforts of others. Courts have applied the term “security” in a wide range of contexts, including even investments in diamonds, minks, chinchillas, and orange groves.

What is Securities Fraud?

Generally speaking, securities fraud occurs when a false statement is made in connection with the issuance or sale of a security. It is not necessary that an individual actually profit from his activity. Typically, securities fraud happens in one of three ways:

  • Corporate misrepresentations, where a company’s officer or director does not accurately report the company’s financial information to its shareholders or the market at large.
  • Insider trading, in which a corporate insider takes non-public information and either (i) buys or sells stock in his company or (ii) passes it along to a third-party, who then buys or sells the company’s stock based on the information..
  • Third-party misrepresentations, also called “pump and dump,” in which false information about a company is disseminated in order to drive up its stock price, allowing an individual to sell his shares at an artificially created profit.

These, however, are just mere examples. Securities fraud can happen in a myriad of ways, including Ponzi or pyramid schemes, churning, and advanced-fee schemes.

Securities Fraud Lawyer

Early legal representation in these cases is critical. Not only are there potentially severe criminal penalties, but often there are parallel civil consequences, as well – including a possible permanent bar from the securities industry. Significant fines and restitution also are common. Our strong criminal-defense team can evaluate any allegations against you and provide advice about the facts and laws surrounding complicated securities transactions.

Whether you want to go to trial or want a quiet settlement, you need a lawyer with the knowledge and experience to help you fight for the best possible outcome in your case. Having a lawyer before you talk to a police officer or federal agent is one of your rights as an American and it is wise to talk with a lawyer before you try to “go it alone” against powerful and experienced opposing forces. Lawyers at Gaskins Bennett & Birrell have handled many complex securities fraud cases involving unique legal and factual issues. Effective lawyers have to have a savvy understanding of these issues and a determination to wade through the facts and tell your side of the story.

Our Criminal Defense Team

Andrew Birrell

Managing Partner

Have you been charged with securities fraud?

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A highly respected, trial-focused law firm, our members include three attorneys elected to membership in the American College of Trial Lawyers, and numerous attorneys designated “Super Lawyers” or “Rising Stars” by Minnesota Law & Politics magazine. We have decades of trial and appellate experience, and the good judgment such experience brings.

Our Attorneys are resourceful, tough, and committed to our clients’ interests, and we have the ability to keep the orders, verdicts and judgments we obtain on appeal.

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