SEC Fraud Defense Lawyer in Los Altos
As a part of Silicon Valley, Los Altos, California, has lots of startups that are seeking capital to grow. But getting investors to buy parts of the company by issuing securities in it is a heavily regulated undertaking. Furthermore, all of the action in Los Altos has attracted the attention of the U.S. Securities and Exchange Commission (SEC), the federal agency that is responsible for enforcing federal securities laws. Running afoul of any of these laws and regulations can subject individuals, companies, and securities issuers to massive penalties.
The securities fraud defense lawyers from The Criminal Defense Firm strive to guide clients in Los Altos, California, through the minefield that is federal securities laws and protect them from the penalties that can come from allegations of wrongdoing – whether they are pursued civilly or criminally or otherwise.
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)
An Overview of SEC Fraud
SEC fraud, or securities fraud, encompasses a huge range of deceitful and fraudulent conduct that uses securities to deprive others of their money. It is prosecuted civilly or administratively by the SEC, and criminally by the U.S. Department of Justice (DOJ) if the SEC makes a criminal referral.
There are numerous laws that prohibit the many different iterations of securities fraud, but the most common ones to get invoked by federal law enforcement agencies are the:
- Sarbanes-Oxley Act
- Securities Act of 1933
- Securities Exchange Act of 1934
- Dodd-Frank Act
- Foreign Corrupt Practices Act (FCPA)
Additionally, some of these laws give the SEC legal authorization to pass and promulgate regulations to help the agency enforce the law and to explain what the law entails and how companies and individuals can comply with it. Many of those regulations, however, seem to go beyond those goals. Controversially, some are even the legal support for some criminal offenses and white collar crimes, such as insider trading.
The SEC will investigate suspected violations of these federal securities laws with an eye towards taking one of the following types of SEC enforcement actions:
- Criminal
- Civil
- Administrative
- Some other type of action
Criminal allegations of SEC fraud generally require proof that the suspect acted with an intent to defraud someone. If proven beyond a reasonable doubt by the DOJ, though, criminal SEC fraud cases carry substantial prison time, criminal fines, other financial penalties, probation, and some crippling collateral consequences of a conviction.
Civil enforcement actions do not carry prison time. However, they also generally require less of a showing of intent and have a lower burden of proof for prosecutors to reach. The penalties are still quite substantial, though, including disgorgement of profits from the fraudulent activities, fines, potentially treble damages, and other penalties.
Administrative actions do not even go through the federal court system. Instead, they are heard by the SEC, itself. The penalties of an adverse outcome, though, are limited to fines and professional repercussions, such as a license suspension or revocation.
The SEC can also choose to:
- Impose a stop order
- Issue an administrative order
- Audit you
Some Examples of SEC Fraud
These securities laws and regulations are written vaguely enough for novel forms of deceptive conduct involving securities to still be unlawful, even if they do not explicitly violate the law. There are some common examples of SEC fraud that keep coming up, though.
One example is market manipulation or stock fraud. Markets can be manipulated in a variety of ways, just three of which are:
- Wash trading, where the perpetrator buys and then immediately sells securities in an issuer to stimulate activity and get other investors to get involved
- Pump and dump schemes, where the perpetrator buys lots of shares in a company to raise the price enough for other investors to buy into the hot stock, only to sell it all at the inflated price for a profit
- Simply spreading misinformation about a company to get other investors to buy or sell their shares to the perpetrator’s financial benefit
Another example is insider trading. This is the crime of using material and non-public information to trade in securities. It is prohibited by SEC Rule 10b-5, one of the broadest and furthest-reaching regulations passed by the SEC, and carries up to 20 years in prison.
There is also unauthorized trading, where a broker-dealer buys or sells securities on behalf of a client but without that client’s authorization. These allegations are common because brokers are tasked with maximizing their client’s investments, and doing so may require immediate action. If a broker-dealer makes a trade that they are confident will pay off but for which they may lack authorization, and then the trade does not pan out the way they expected it to, they are likely to get accused of unauthorized trading.
Securities issuers can also face SEC fraud allegations for omitting or misrepresenting important information in their attempts to solicit investment. This leaves investors in the dark about key details that likely would have influenced their investment decisions.
Finally, embezzlement is a white collar crime that also comes up frequently in the securities field. The offense is a theft by taking money or property that has been entrusted to you. Broker-dealers who receive money from clients in order to invest it on their behalf, but who then pocket the money for their own use, have just embezzled it. The same holds true for entrepreneurs who convince someone to invest in their company but who then deposit the funds in their personal account and use it for their own ends.
Certain Industries Face Increased Scrutiny in Los Altos
In the past few years, the SEC has shown increased scrutiny for certain sectors and industries in Los Altos and the surrounding areas, largely because the malfeasance of some bad actors was big enough to make it into the national news cycle and create political pressure to prevent similar things from happening again. As unfair as it might be, stakeholders of companies in the following areas should still be aware that the SEC is watching their conduct closely:
- Healthcare startups and pharmaceutical companies
- Cannabis-related companies
- Social media companies
- Companies in the cryptocurrency field
- Mobile app creators, particularly those that provide a platform for consumers to trade securities
However, companies and individuals outside of these hot sectors can also face SEC enforcement actions as well.
Frequently Asked Questions About Securities Fraud and The Criminal Defense Firm
When Should I Hire a Securities Fraud Defense Lawyer?
The best time to hire a securities fraud defense lawyer is immediately. This is especially true if you have heard from the SEC that you are being formally accused – whether criminally or otherwise – of securities fraud in one of its many forms. If that is the case, the SEC has already spent months putting together incriminating evidence against you and the lawyer that you hire will have a lot of work to do in order to catch up.
The better thing to do would be to hire a securities defense lawyer as soon as you learn, or even just suspect, that you are under SEC investigation for fraud. You have rights during this process and invoking them can better secure your future. In many cases, seemingly incriminating evidence can be explained to investigators. Sometimes, a good defense lawyer will be able to ground the investigation by persuading investigators that there is nothing to see.
Delaying in hiring a lawyer takes these good outcomes off the table.
What Makes The Criminal Defense Firm Different?
The Criminal Defense Firm is different in how we structure our firm.
At our firm, all of the lawyers on our staff are senior-level attorneys with years of experience defending against securities fraud claims. Many of them were even prosecutors at the DOJ or other federal law enforcement agencies before joining The Criminal Defense Firm. We understand how these cases unfold and how to best prepare you for what will come next. Furthermore, because all of the lawyers on our staff are senior-level, all of the legal work done on your case will be performed by one of these attorneys. The experienced lawyer whose background drew you to The Criminal Defense Firm will be the one you interact with and the one who prepares your case from start to finish.
This makes us different from other SEC fraud defense firms in Los Altos. While they may have experienced white collar defense lawyers at the top rungs of their firm, most of their lawyers will be junior associates with very little experience handling cases like yours. However, those junior associates, and even some paralegals, will be the ones who do much of the work on your case, often with minimal oversight from senior attorneys.
Our way of doing things has likely contributed to our track record of successes in SEC fraud cases.
Why Don't You Call Your Firm the Best in Los Altos, California?
That is something that means far more when it comes from our prior clients. Read their testimonials here.
SEC Defense Lawyers at The Criminal Defense Firm Serve Los Altos, California
If you or your company has been charged with securities fraud, the time to hire an SEC fraud lawyer is now. Even if you think that you might just be under investigation, having an experienced securities fraud lawyer at your side can pay huge dividends by invoking your rights and working to reduce your legal exposure.
The Criminal Defense Firm’s SEC fraud defense lawyers have legally represented numerous clients in Los Altos, California. Contact them online or call their law office’s national intake number at (866) 603-4540.