Experienced Criminal Defense Attorneys

2 types of securities fraud

On Behalf of | Jan 29, 2025 | CRIMINAL DEFENSE - White Collar Crimes

Those accused of securities fraud, or sympathetic to those who are accused might not feel much wrong was done. They might feel all they did was take the wheeling and dealing that so many usually applaud them for in a slightly different direction. 

Here are some examples of when the law may decide that unpassable lines have been crossed.

1. Insider trading

If you work in horse racing you’ll likely get a lot of people asking you for tips as to what to bet on. A similar thing can occur if you work in the financial world. People know you have more knowledge than most and may hope you can share a nugget of information with them. Sometimes this is fine, but sometimes it can lead to accusations of insider trading if it is felt the information you shared was not public knowledge.

2. Pyramid schemes

Multi-level marketing (MLM) schemes are not necessarily illegal and there are lots of them still about. They have proved effective in making some people good money. The problem with an actual pyramid scheme is that the flow of new investors will inevitably dry up, leaving those who invested later out of their money. Whether or not a particular scheme qualifies as fraudulent will be down to a court to determine, but even the allegations that it is could prove damaging for those involved.

Securities fraud convictions often result in harsh sentences. Sometimes people are sentenced to far longer behind bars than others who have physically harmed people through violent crime. If you believe you are under investigation or have already been accused, it will be important to learn about your defense options.