Strong Legal Guidance For Employees & Businesses SCHEDULE A CONSULTATION

Understanding Securities Fraud Claims

Duwel Law Jan. 30, 2024

Judge gavel with Justice lawyers having team meetingInvestments are important for financial growth and stability; however, the world of securities is not always as straightforward as it seems. Unfortunately, it can also be a playground for fraudulent activities. When dealing with investments, understanding securities fraud is integral to protecting your interests. If you suspect another's involvement or have been accused of such activities, you deserve to understand your rights and options for moving forward.  

At Duwel Law, we will dissect the often misunderstood concept of securities fraud claims, helping you identify their occurrence and guiding you on the steps to take in such instances. We're a trusted advisor and partner to our clients in Dayton, Ohio, and throughout Montgomery County, Miami County, Greene County, Darke County, and Warren County. With over 50 years of combined experience and deep roots in the community, our business law attorneys are committed to providing personalized legal guidance in employment and business law matters. Reach out to us today to schedule a consultation—let's take steps in the right direction together. 

What Is Securities Fraud? 

Securities fraud is a serious matter that can cause significant financial harm to investors. It involves deceptive practices in the financial market, where information is manipulated or misrepresented to deceive investors. As an investor, it's vital to understand the common types of securities fraud committed by corporations and individuals alike. This knowledge can help you stay vigilant and protect your investments. 

Common Types of Securities Fraud 

Securities fraud can vary depending on whether it is committed by corporations or individuals, each exhibiting its unique set of fraudulent practices. Some of the common types committed by corporations include: 

  • Insider Trading: This form of fraud occurs when individuals within a corporation trade stocks based on non-public information. This gives them an unfair advantage over other investors and is a direct violation of trust. 

  • Market Manipulation: Some corporations may engage in market manipulation by artificially inflating or deflating stock prices. They do this through false or misleading statements, creating a false perception of market demand. 

  • False Reporting: Corporations might provide inaccurate or misleading financial statements, misrepresenting their financial health to investors. 

  • Ponzi & Pyramid Schemes: These fraudulent investment schemes promise high returns to investors but rely on funds from new investors to pay off existing investors. These schemes are unsustainable and eventually collapse when new investments dry up. 

On the other hand, securities fraud is not just committed by corporations. Individuals such as financial advisors, brokers, and analysts can also be perpetrators of these fraudulent practices. Some of these types committed by individuals include: 

  • Churning: Financial advisors may excessively trade securities in a client's account to generate commissions, disregarding the client's best interests. 

  • Unauthorized Trading: This involves trading securities without the client's consent or exceeding the authorized trading limits. 

  • Recommendation of Unsuitable or High-Risk Investments: Advisors might suggest clients invest in securities that are not suitable for their risk tolerance or investment goals. 

  • High-Pressure Sales Tactics: Some individuals use aggressive and misleading tactics to pressure investors into making hasty investment decisions. 

  • Misappropriation of Funds: Individuals may divert investor funds for personal use instead of investing them as instructed. 

  • Failure to Invest as Instructed: Failing to follow the specific investment instructions provided by clients, resulting in financial losses. 

By understanding these types of fraud, you are better equipped to protect your investments and navigate the financial marketplace with confidence. 

If You're Accused of Securities Fraud 

If you're accused of securities fraud, it's crucial to respond promptly and effectively. The repercussions of securities fraud can be severe, including hefty fines, professional damage, and in some cases, even imprisonment. Here are some steps you should consider: 

  • Hire an experienced attorney: This is a highly specialized field, so it's essential to hire an attorney experienced in securities law. They will guide you through the legal process, protect your rights, and help develop a robust defense strategy. 

  • Maintain silence: It is advisable not to speak about the case to anyone but your attorney, especially not to regulatory bodies or law enforcement without legal counsel present. Anything you say can be used against you in court. 

  • Gather and preserve evidence: Start collecting all relevant documents, emails, and other communications that can be utilized in your defense. Preserve all evidence that may demonstrate your innocence or disprove the allegations. 

  • Cooperate with your attorney: Be open and honest with your attorney and provide them with all necessary information. The more they know, the better they can defend you. 

  • Prepare for the long run: Legal proceedings for securities fraud can be lengthy. Prepare mentally and financially for a potentially prolonged battle.  

Remember, an accusation of securities fraud is not a conviction. Accurate legal advice and a strong defense can significantly impact the outcome of your case. 

Choose Duwel Law for Your Securities Fraud Concerns 

At Duwel Law, we have a wealth of experience in handling securities fraud claims. We're committed to providing the legal guidance you need during this challenging time. If you're dealing with securities fraud allegations, we strongly advise reaching out to us for a consultation.  

When faced with securities fraud allegations, you need a trusted partner to defend your rights and guide you towards a favorable outcome; so if you or your business are dealing with securities fraud allegations, or you suspect another party of committing fraud, don't wait. Contact us today to schedule a consultation. We're here to provide the legal support you need to protect your rights and achieve a favorable outcome.