When people hear the term “securities fraud,” they might not realize that this term encompasses more than one type of illegal activity. It is imperative that anyone who is facing charges related to securities fraud understands exactly what they are being charged with.
Having a good understanding of the term and what various forms of it entail might help you to decide how to plan your defense. Consider these points.
What are Ponzi and pyramid schemes?
These schemes are built on false promises of income for new investors. Interestingly, the only source of funds in these schemes comes when people get new investors to jump on board with the program.
What are high yield investment frauds?
These are investment opportunities that promise returns that seem too good to be true. Oftentimes, this type of fraudulent activity is unsolicited by the alleged victim. This type of securities fraud can include various types of instruments, including commodities, precious metals, securities and precious metals.
Are there other types of securities fraud?
There are multiple types of securities fraud, including insider trading. Insider trading occurs when a person uses intimate knowledge that he or she has of a company to decide how to handle investments with that company. Insider trading is what Martha Stewart went to prison for.
Facing these charges can land you in prison and facing other penalties. It is imperative that you fully understand the charges, possible penalties and defense strategy options you have. You can’t wait until just before the trial to start on your defense. These criminal cases usually involve considerable evidence that you have to go through before you can start working on a defense.
Source: Federal Bureau of Investigation, “Securities Fraud Awareness & Prevention Tips,” accessed April 18, 2017