Securities fraud is a matter that must be taken seriously

On Behalf of | Jan 4, 2018 | Securities |

When you have inside knowledge of a company that is publicly traded, you need to make sure that you are handling that knowledge in an appropriate manner. Namely, you should be certain you aren’t committing insider trading, which is a form of securities fraud. Being charged with securities fraud can mean that you are blacklisted in your profession and that you are looking at spending time in prison.

There are a few different actions that can lead to a securities fraud charge. One of these occurs when a person who has confidential information about the financial aspects of a specific company uses that information to make decisions about buying or selling stock. In some cases, they might pass this confidential information on to another person who also uses that information to decide what to do with stock. Martha Stewart is an example of someone who was convicted of this charge.

Another type of securities fraud occurs when an executive of a company misrepresents the company’s financial information. This misrepresentation might lead people to buy or sell stock based on this inaccurate information. It might cause shares of the company to go up and encourage people to invest when they wouldn’t have otherwise. A similar type of securities fraud has to do with third parties who misrepresent company information for the purpose of influencing stock prices.

Insider trading charges must be taken very seriously. These charges usually come with a considerable paper trail that is hard to refute. Your defense must be carefully planned to show your side of the story without admitting fault.

Source: FindLaw, “Securities Fraud,” accessed Jan. 04, 2018

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