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Examples of securities fraud

On Behalf of | Nov 27, 2021 | White-Collar Crimes |

It is important to have access to all relevant financial information when making decisions about investments. This is one of the reasons why allegations of securities fraud are treated so seriously in Florida. Whether made intentionally or by accident, an act of securities fraud could land someone behind bars and/or with hefty fines. Examples of securities fraud include: 

  • Inaccurate financial reports 
  • Insider trading 
  • Third party misrepresentation 

Company securities fraud 

Sometimes the actual company is responsible for committing securities fraud. This generally occurs when a director or an officer inaccurately reports financial information that artificially raises the worth of the company. This may encourage some investors to purchase shares of what is actually an unhealthy company, and many end up losing their entire investments. 

Individual securities fraud 

This type of securities fraud normally happens on a smaller scale. An example of insider trading may involve only one person, such as an accountant who took note of rapidly falling income who used that insider knowledge to sell off his or her stock without notifying the company’s board. Another example includes an individual who is not affiliated with a company buying up stock, releasing false information to drive up the price, encouraging others to buy and then selling his or her shares when the price is high. 

Allegations of securities fraud can have a lifelong impact. On top of legal consequences like prison time and fines, those who are charged often struggle to find employment in the financial industry and many end up having to switch career paths altogether. Whether a defendant chooses to negotiate a plea deal in exchange for lesser charges or fight to the fullest extent of the law in a courtroom, securing the best possible outcome generally begins with building a strong criminal defense foundation. Defendants often choose to accomplish this step under the careful guidance of an attorney who is experienced in criminal law in Florida at the state and federal level.