Fraud is defined as the theft of money or other property with monetary value, such as personally identifying information that can be used to access bank accounts and impersonate the victim, through deception rather than directly stealing from the victim.
Securities fraud is theft through the use of stocks and other investments. It can be committed through the use of false information about the current or forecasted securities market, deceptive and falsified investment strategies, and misrepresentation as a legitimate broker or brokerage company.
Types of Securities Fraud
There are many different actions that can be charged as securities fraud. These include:
- Insider trading. When a corporate insider or a shareholder who owns more than 10 percent of a company engages in stock trading, he or she is subject to certain reporting requirements. Failure to make these reports may be charged as securities fraud. Insider trading can also be the sale or purchase of stocks based on information not available to the public;
- Embezzlement by a stockbroker;
- Providing corporate auditors with fraudulent information about a company’s financial state;
- Intentionally publishing incorrect information on a financial report;
- Ponzi schemes. These occur when an individual creates an investment fund that depends on new investors, rather than returns, to pay a profit to the initial investors; and
- Microcap stock fraud. This type of securities fraud can take many forms, such as:
- “Pump and dump” operations, which involve circulating false information about a low-value stock to engage investors. Once the stock is purchased at inflated prices, the offender sells it for a steep profit;
- Unauthorized trading of microcap stocks, defined as stocks for companies that have market capitalizations between $50 million and $300 million; and
- Chop stocks, which are purchased at very low prices and sold for high profits, often involving an element of “paying off” brokers.
Penalties for Securities Fraud in Florida
In Florida, securities fraud can be charged as a misdemeanor or a felony, depending on the circumstances of the case.
If the proceeds from the sale, secretion, withholding, or disposition of the stolen property are less than $300, the individual may be charged with a first degree misdemeanor. He or she can face up to one year in jail and a fine of up to $1,000 if convicted.
When the proceeds from an act of securities fraud exceed $300, the individual may be charged with a third degree felony. The penalties for this conviction are up to five years in prison and a fine of up to $5,000. Repeat offenders can face up to 10 years in prison.
Work with an Experienced Tampa Criminal Defense Attorney
If you have been charged with securities fraud or any other type of fraud, you could be facing steep criminal penalties. Start working with an experienced criminal defense attorney as soon as possible to develop an effective legal defense strategy for your case. Contact All Criminal Defense Law Group, P.A. today to set up your initial consultation with a member of our firm.