SEC Investigations, Securities Fraud, & Other Violations of Securities Law Defense in San Diego

Investment fraud involves lying about different aspects of an investment with the intention of deceiving or manipulating potential investors or government regulators. An individual may commit investment fraud by steering another person into a fake investment vehicle or lying about the structure of an investment scheme. Some investment fraud schemes include flashy financial planners who attempt to use their rhetorical gifts to lure unsuspecting individuals into faulty investments or investments that simply do not exist.

One of the most famous forms of investment fraud is the Ponzi scheme. In a Ponzi scheme, an individual proposes that they are an investment firm and they are putting investors’ money into a financial instrument that they know more about than anyone else. The scheme often seems for months or years to be successful and to be meeting all of the hopes and goals of the investors. In reality, the schemer is simply using all of the money that he or she is collecting to pay off returns and the first few people who demand their money back. They are sitting on the rest of the money and taking a significant portion to live a lavish lifestyle. The fraud fails when enough people demand their money back and realize that it is not being invested.

Stock fraud is a specific type of securities fraud that focuses on the manipulation and deception surrounding stocks. A common stock fraud scheme is known as a pump and dump scheme. In this illegal scheme, individuals flood in and artificially inflate the price of a stock. When other individuals being defrauded have also bought in and put more money into the stock, the original fraudsters withdraw their investments and the victims lose the money they have invested.

Individuals flood in and out of stocks on a daily basis. The simple practice of buying a stock along with lots of other people and then getting out quickly is not inherently illegal. What makes a pump and dump scheme illegal, however, is when there is a coordinated effort and that coordination can be proven. In that way, individuals are acting together in order to artificially reflect the value of a stock. Actions that manipulate the role of the market as a reflection of company wealth will always be viewed suspiciously by regulators.

Insider trading is the practice of stock trading based on information that is not available to the public. It involves cheating the rest of the market and is viewed as illegal. Insiders are often privy to sensitive information that moves a stock price up or down. A poor earnings report can hurt a stock price just as much as introducing an exciting new product can help it.

Investment regulation is based on the fact that everyone can make or lose money in the same way and based on the same public information. An individual who buys a stock right before the announcement of a new product or sell a stock before an indictment announcement has gained an advantage over other traders and dilutes the power of the market to accurately reflect the worth of companies. These cases are usually proved by the timing of stock trades and communications that individuals may have with those privy to insider information.

Minor cases of insider trading often involve individuals who bought a tiny amount or heard a rumor from one of their friends that they could have feasibly thought was already public knowledge. Serious cases may involve thousands or millions of dollars that would have otherwise not been made or been lost. Violators can be subject to prison time if convicted.

Insider trading definition

Insider trading is defined as a practice where an individual is trading off of data that is not publicly available and has the potential to move the price of a stock.

IRS tax fraud involves lying to the IRS at any point during the tax filing, declaration, or withholding process. IRS tax fraud may include any number of potential illicit acts. These acts include lying about income, types of businesses, and amounts that have been paid to the IRS. An individual may also commit IRS tax fraud by paying their tax bill with a worthless check.

This fraud often occurs when an individual has collected a large sum of money and does not want to have to pay taxes with it. Millions of Americans have received money “under the table” in some way that they have not paid taxes on. These individuals could face tax fraud charges if the violation reaches a certain financial limit and there is evidence of a deliberate action to defraud the government.

A criminal conspiracy to commit fraud involves a person planning and talking about how they are going to commit fraud. Drawing together a scheme and then taking steps to make that scheme a reality can be considered conspiracy. A prosecutor has to prove in a court of law that a person was not simply daydreaming about committing fraud and actually had a plan to carry out.

That plan does not have to occur in order to be illegal if it meets the standard of a criminal conspiracy. In some cases, a conspiracy charge can be more harmful than the actual crime being committed. This situation is especially possible if an individual has a large-scale conspiracy for a crime that involves a relatively small amount of money.

Securities fraud attorney serving San Diego, Chula Vista, El Cajon, National city, La Jolla and surrounding California communities.