Fighting for the Rights of the Accused in Federal Court Since 2004

Law Office of Ann Fitz

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(561) 932-1690

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    • Home
    • About
      • About Us
      • Ann Fitz
    • Federal Criminal Defense
      • Federal Criminal Defense
      • Federal Investigations
      • Federal Bail
      • Federal Sentencing
    • White Collar Crimes
      • White Collar Crimes
      • Conspiracy
      • Health Care Fraud
      • Mail Fraud and Wire Fraud
      • Securities Fraud
      • Bank Fraud
      • Insurance Fraud
      • Tax Fraud
    • Post-Conviction Relief
      • Post Conviction Relief
      • Federal Criminal Appeals
      • 2255 Habeas Petitions

(561) 932-1690

Law Office of Ann Fitz

Law Office of Ann FitzLaw Office of Ann FitzLaw Office of Ann Fitz

  • Home
  • About
  • Federal Criminal Defense
  • White Collar Crimes
  • Post-Conviction Relief

Securities Fraud

 Securities fraud is the act of lying or sharing insider information about a company or its stock value to influence other people’s investment decisions. While this may seem straightforward, the actual practice of prosecuting or defending a person who is charged with securities fraud is complex.  Securities fraud charges cover a wide range of acts that a person can commit and often coincide with an SEC civil action or investigation. 


Below are a few common examples of securities fraud:


Ponzi Schemes


A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors.   Ponzi scheme organizers often promise high returns with little or no risk. Instead, they use money from new investors to pay earlier investors and may steal some of the money for themselves.  With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.


Market Manipulation


Market manipulation occurs when an officer or director of a corporation does not accurately report the business’s financial information to its shareholders. This inaccurate report can artificially raise the value of the company’s stock and may urge investors to buy shares of an ailing company. If the company then goes bankrupt, the people who bought shares based on false information lose their entire investment.


“Pump And Dump” Schemes


“Pump and dump” schemes are a prevalent type of third-party misrepresentation that occur when a third-party gives out false information about the stock market, a company or an industry.  In a “pump and dump” scheme, a person will find an unknown company with affordable stock and buy many shares. That person will then send out false information about the company to encourage others to buy the stock, which then drives up the price. Once the price of the stock is high enough, the person sells, or dumps, their shares for a profit, devaluing the stock.


Insider Trading


Insider trading is a type of securities fraud that involves the trading of a corporation’s securities (stocks, bonds or stock options) by corporate insiders such as officers, key employees, directors or holders of more than 10 percent of the firm’s shares. Insider trading is illegal when an insider buys or sells a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security.


Examples of insider trading include:


  • Corporate officers, directors and employees who trade the corporation’s securities after learning of significant, confidential corporate developments
  • Friends, business associates and family members of corporate insiders who trade securities after receiving information
  • Employees of law, banking and brokerage firms who have secret insider information about a corporation, who then trade securities after receiving confidential information
  • Government employees who learn insider information because of their job



The criminal penalties for all forms of securities fraud are severe. Call us at 561-932-1690 to schedule your free consultation. 

SEC Rule 10b-5

SEC Rule 10b-5 broadly forbids three things:

  1. employing any scheme or artifice to defraud;
  2. making any untrue statement of material fact or omitting a necessary statement of material fact that would make the statement not misleading; and,
  3. engaging in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.


Brokers may be held liable for violating Rule 10b-5 if an investor proves that:

  1. the trading in his account was excessive in light of the investor objectives;
  2. the broker in question exercised control over the trading in the account; and,
  3. the broker acted with intent to defraud or with willful and reckless disregard for the investor's interests.


The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. 


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