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What Are Common Types of Securities Fraud?

The gravamen of securities fraud is an unfair information gap between parties transacting in securities, be it a corporate insider trading (with an outsider) on material, nonpublic information, or the injection of false information into the marketplace to profitably trade on the temporary price distortions such information will cause.

Some common types of securities fraud include:

  • Manipulating stock prices
  • Lying on SEC filings
  • Committing accounting fraud

Many types of financial instruments can be considered securities, and securities fraud allegations can encompass many different types of conduct.

Serious securities fraud examples include:

  • Insider trading: Using material, non-public information about a company to affect buying or selling decisions.
  • False statements on SEC filings: Making false or intentional misleading disclosures about securities to the SEC injects false information into the market.
  • Market manipulation: Any intentional interference with the market which creates artificial, false or a misleading appearance in the market E.G. churning, wash trades, spoofing, paint the tape, ramping.
  • Ponzi schemes: Paying earlier investors with funds provided by later investors.
  • Pyramid schemes: Recruiting members for an organization and funneling membership fees to earlier investors to profit.
  • Broker embezzlement: Misappropriating funds from brokerage accounts.
  • Late-day trading: Engaging in trades after hours but recording the transactions based on the prior day's net asset value.

The processes involved in buying or selling stocks and commodities are intricate and closely scrutinized Even an innocent mistake on your part can trigger an investigation which could lead to an allegation of securities fraud. If you have been investigated or accused, exercise your rights to remain silent and have an attorney represent you.

Then, reach out to Arseneault & Fassett, LLC. We are here to listen to your side of the facts and build a compelling defense on your behalf. We firmly believe in the presumption of innocence, and when we take on a case, we don't pass judgment. We leverage all our knowledge, skills, and resources to work toward a favorable result in the case.

What Are the Penalties for a Securities Fraud Conviction?

Because securities fraud schemes are many and, depending on the circumstances, can be prosecuted at the state or federal level, the conviction penalties vary. Unfortunately, if you are found guilty of the offense, you could be sentenced to years in prison and may be ordered to pay a steep fine. For instance, the punishments under 18 U.S.C. ยง 1348, which makes it illegal for a person to carry out a commodities scheme to defraud someone, include a fine and up to 25 years of imprisonment.

A securities fraud conviction can have other severe consequences for your life. It can ruin your reputation, result in a criminal record, cause you to lose your professional license, bar you from the market, and make it near impossible for you to find a career in a field you enjoy.

A Dedicated Team of Attorneys Our powerhouse team provides a strong defense and produces high-quality results for our clients. See why our clients trust us.
Arseneault & Fassett, LLC Arseneault & Fassett, LLC

Our Firm Is Ready to Help You

When you are facing substantial penalties and life-altering consequences, you need to aggressively fight your charges. You can do that with the help of our New Jersey securities fraud lawyers. At Arseneault & Fassett, LLC, we will be focused on your best interests as we skillfully guide you through the judicial process.


Reach out to us today by calling (973) 310-6664 or submitting an online contact form.


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    A diversionary dismissal of a state criminal indictment charging a licensed public adjuster with second-degree insurance fraud offenses.
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    An immunity order for a labor official exposed to federal criminal charges.
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