Fremont SEC Fraud Defense Attorney
Regulated securities professionals and company stakeholders need to be extra careful in Fremont, California. Because of Fremont’s close proximity to so many startup companies and venture capital firms, the U.S. Securities and Exchange Commission (SEC) has been paying extra close attention to securities transactions in the area. This has not just meant more civil and criminal enforcement actions by the SEC. It has also meant that companies in Fremont have to pay more attention to, and more resources on, their SEC compliance efforts.
The Criminal Defense Firm and its securities fraud defense lawyers also have a strong presence in Fremont, California. With our strong defense strategies and zealous advocacy for our clients, numerous individuals and companies in the area have successfully fought off allegations of wrongdoing and securities fraud.
The SEC Enforces Federal Securities Laws
Securities fraud is any deceptive conduct related to the issuance of securities in a company or in their subsequent trading. Securities fraud is prohibited by both state and federal laws. Some of the most potent and commonly-cited federal ones are the:
- Securities Act of 1933
- Securities Exchange Act of 1934
- Dodd-Frank Act
- Sarbanes-Oxley Act
- Foreign Corrupt Practices Act (FCPA)
The SEC is the federal agency that is responsible for enforcing these federal laws, hence why securities fraud is sometimes referred to as SEC fraud.
However, these federal laws also authorize the SEC to promulgate regulations that allow the agency to enforce the laws more efficiently and to clarify what the law means. Those regulations, such as the infamous SEC Rule 10b-5 (17 C.F.R. § 240.10b-5), arguably go far beyond that authorization and allow the SEC to take enforcement actions against conduct that was not considered to be within the realms of the laws by the people who were creating and passing them.
Put our highly experienced team on your side
Brian J. Kuester
Former U.S. Attorney
Former DA
Amanda Marshall
Former U.S. Attorney
Local Counsel
Joe Brown
Former U.S. Attorney
& Former District Attorney
Local Counsel
John W. Sellers
Former Senior Trial Attorney
U.S. Department of Justice
Local Counsel
Linda Julin McNamara
Former Chief, DOJ Appeals
Local Counsel
Joanne Fine DeLena
Former Assistant U.S. Attorney
Local Counsel
Aaron L. Wiley
Former Federal Prosecutor
Local Counsel
Roger Bach
Former Special Agent (OIG)
Chris Quick
Former Special Agent (FBI & IRS-CI)
Kevin M. Sheridan
Former Special Agent (FBI)
Ray Yuen
Former Supervisory Special Agent (FBI)
Dennis A. Wichern
Former Special Agent-in-Charge (DEA)
The SEC Has Several Types of Enforcement Actions at its Disposal
In enforcing these federal securities laws, the SEC can take several different actions against suspected violators. The agency can:
- File criminal charges
- Initiate a civil lawsuit
- Pursue administrative remedies
- Take some other form of action
Which of these SEC enforcement actions the agency will take will depend on the evidence that the SEC investigation has uncovered.
If there is evidence that a suspect acted with an intent to defraud someone using securities, then the SEC can make a criminal referral to the U.S. Department of Justice (DOJ) for prosecution. The SEC does not have the legal authority to file criminal charges on its own. Once the DOJ has the case, though, they will have to prove, beyond a reasonable doubt, that you acted with the requisite intent. If all of the elements of the offense are proven, you could go to jail, be forced to pay a criminal fine and victim restitution, go through probation, and suffer the many other repercussions that come with having a criminal record.
If there is less evidence that you acted with an intent to defraud, the SEC will likely file a civil claim. Both the standard and the burden of proof will be lower, though prison time will not be on the table for a civil claim. The financial repercussions, though, are often quite steep.
Unintentional conduct can still be pursued administratively by the SEC as securities fraud. These cases do not go to court. Instead, they are processed entirely within the SEC. Your ability to practice in the industry will be at risk, and you could also face a significant fine if the agency rules against you.
Finally, the SEC can choose to take a different enforcement action against suspected securities fraud. For example, it can:
- Initiate an audit to gather more information
- Issue an administrative order
- Impose a stop order against you
Examples of SEC Fraud
Securities fraud can be perpetrated in a wide variety of ways. All of them involve using fraudulent or deceitful conduct in order to get money through the use of securities.
Here are some of the most common.
Omitting or Misrepresenting Information
Securities issuers or others involved in securities transactions can commit fraud if they knowingly omit or misrepresent material information about their securities.
Information is material if a reasonable investor would have relied on it when making an investment decision.
For issuers, omitting or misrepresenting information like the company’s revenue, debts, or liabilities can make the company more enticing and can attract more investment. Other securities professionals can omit or misrepresent information in a mutual fund prospectus or other material.
Market Manipulation
Manipulating the market in deceptive ways to profit from how other investors react to the volatility can also amount to SEC fraud or stock fraud in Fremont.
There are dozens of ways to manipulate the securities market. Just a few are:
- So-called “pump-and-dump” schemes, where the perpetrator buys lots of securities in a company to raise its price, waits for other investors to buy into the company because of the rising share price, and then sells them all at the higher price
- Wash trading, where the investor buys and then immediately sells shares in a company to elevate its transaction rate in the hopes of getting other investors to buy into it
- Spreading lies about a company in order to capitalize on the flood of investors acting on the misinformation by either buying or selling their shares
Insider Trading
Insider trading is the crime of using confidential, non-public, and material information to transact in securities. Because other people do not have access to the information, using it for your financial benefit gives you an unfair advantage. It is prohibited by SEC Rule 10b-5. Convictions carry up to 20 years in prison.
Importantly, it is the information that has to be “insider” – not the person. There are numerous insider trading cases where random people have overheard corporate officers talking about their company and used what they learned to buy or sell stock in the company. They were not “insiders,” but the information was.
Unauthorized Trading
Regulated broker-dealers can commit SEC fraud by conducting unauthorized trading. Brokers are only allowed to transact in securities on their clients’ behalf if they have authorization to do so. Making trades without authorization can lead to allegations of fraud and significant liability.
Frequently Asked Questions About Securities Fraud and The Criminal Defense Firm’s Representation in Fremont
Are There Certain Industries That the SEC Watches Extra Closely in Fremont?
Due to prior and prominent misconduct by companies and executives – some of which made national news cycles – the SEC seems to be intent on cracking down on securities fraud in the following industries and areas in Fremont:
- Cannabis and cannabis-related products
- Cryptocurrencies
- Social media apps
- Pharmaceutical and other healthcare-related companies
- Mobile apps, especially those that offer securities trading abilities for lay consumers
Much of the extra attention on these fields comes from political pressure: Prior incidents have made the SEC worry that not paying closer scrutiny on these relatively unregulated sectors will lead to negative publicity on the agency if another prominent case comes forward.
What Makes The Criminal Defense Firm Different from Other SEC Fraud Defense Firms?
The Criminal Defense Firm is structured differently than most other law firms, and in a way that ensures that you get the legal representation that you expected when you hired us.
Other law firms are composed of lots of paralegals and junior associates who have only just passed the bar exam. Above these professionals, there are a relatively small handful of lawyers who have numerous years of experience in the field. However, it is the experience of those senior-most lawyers that is touted by the firm. When you hire the firm to represent you, you would expect those experienced lawyers to do the work on your case, but that is not what will happen. They will delegate the vast majority of the work to the junior associates and even to paralegals for them to do. Most of the time, you will only interact with the lawyer whose experience drew you to the firm – and who is technically “overseeing” your case – at the very end.
We at The Criminal Defense Firm think that you should be represented by an attorney with the experience that drew you to the firm.
The Criminal Defense Firm only hires senior-level lawyers and investigators who have lots of experience handling securities cases just like yours. Many of our personnel only came to The Criminal Defense Firm after a long and storied career within the DOJ, SEC, or another related law enforcement agency that investigates and prosecutes white collar crimes like SEC fraud. This means we cannot delegate your case to a junior associate or paralegal because we do not have any.
It also means that all of the work done on your case is done by a senior lawyer who understands the gravity of what they are doing. We find that fewer mistakes are made doing things this way, and we think that our firm’s structure is behind our strong track record of successes in federal securities fraud cases.
Why Don't You Call Yourselves the Best Securities Fraud Defense Firm in Fremont, California?
We prefer to let our prior clients say those sorts of things about our firm. Read their testimonials here.
The Criminal Defense Firm: SEC Fraud Defense in Fremont, California
If you have been accused of SEC fraud in Fremont, California – whether in the form of a civil or criminal allegation or otherwise – you need effective and experienced legal representation.
Call The Criminal Defense Firm at (866) 603-4540 or contact them online to get the help you need to invoke your rights and protect your future.