The major regulator overseeing and enforcing securities compliance in the U.S. is the Securities and Exchange Commission (SEC). It is responsible for investigating and prosecuting securities violations.

Many SEC investigations are not criminal in nature, at least initially. SEC investigators routinely launch informal investigations. In the process, they may solicit statements and documents and conduct on site visits of certain regulated entities during which they may examine the books and other documents. If SEC investigators have approached you, you must contact an experienced SEC defense attorney immediately.

If the investigators believe that the federal securities laws may have been violated, they may apply for a formal order of investigation. If granted, it will authorize the SEC to begin an investigation, giving it the right to issue subpoenas for documents and sworn testimony.

If the investigation concludes that a violation of associated laws took place, it will proceed with enforcement. This begins with filing an action in the federal district court, or in an administrative proceeding before an administrative law judge. The outcome of the proceedings depends on the forum where it’s taking place. The district court judge may order severe monetary penalties, injunctive relief, which will shut down the defendant’s business activities, disgorgement of ill-gotten gains and a prohibition for the defendant serving as an officer or director of a public company.

The administrative law judge can award penalties, order disgorgement, issue a cease-and-desist order, and prohibit a respondent from future employment at the regulated entity. Our NYC securities fraud lawyers can help you understand the implications of all of these things.

The term “securities fraud” is very broad and there are various activities, which can be classified as securities fraud by federal and local regulators.

• insider trading;
• misrepresentation to investors;
• stock embezzlement;
• improper investments;
• investment advisor misconduct;
• manipulations with stock options to executives;
• improper use of offshore accounts;
• inflating reported assets;
• filing false quarterly or annual reports;
• false press releases;
• making false promises of exaggerated returns on investments.

There are numerous categories of individuals who may be facing SEC investigations. The most common groups targeted by SEC enforcement are:

• executives accused of insider trading;
• executives suspected of making false accounting entries;
• investment brokers investigated for misrepresenting financial products;
• individuals who give investment advice or sell securities without a license.

Most SEC proceedings including investigations and enforcements are not criminal. If SEC believes that criminal prosecution is warranted, it may refer the case to the Department of Justice. The Department of Justice may conduct its own criminal investigation or may work together with the SEC on a case. However, it is important to realize that most federal securities criminal prosecutions begin as SEC enforcement actions, and in most of these cases the SEC lawyers work together with local US Attorneys. This is why each SEC investigation must be treated as potentially criminal and the assistance of an experienced NYC securities fraud lawyers is essential from the very beginning.

During the past two decades there has been a dramatic surge in SEC enforcement and criminal actions aimed at securities fraud. The government has allocated virtually unlimited resources for dealing with corporate and securities fraud in violation of the 1933 and 1934 Acts. One of the most targeted areas of enforcement is insider trading.

In a very basic understanding, insider trading occurs when a corporate insider, such as an officer or director breaches his or her duty to the company by purchasing or selling the company’s shares based on non-public information he or she has obtained thanks to their special position in the company.

Insider trading is not limited to actual insiders and also applies to a “constructive” insider, such as an attorney, accountant, or financial advisor, who has a special confidential relationship with the company.
Furthermore, insider-trading liability may even apply to those who trade in the securities of a company with which they have no relationship at all, if they have misappropriated some sensitive information resulting in stock manipulation. Both the tipper and the person who receive the information are liable for this offense.

The securities laws are extremely complex and defending such cases requires a thorough understanding of the applicable laws and regulations and out of the box strategies. Most defense attorneys are lost in the labyrinth of these regulations. In fact, even experienced federal prosecutors often don’t understand the complexity of the regulatory scheme. The United States Attorneys routinely use the help of more experienced SEC attorneys in complex securities prosecutions. It is not an exaggeration to state that even a sophisticated businessperson many also be confused by and lost in this maze. It could be an effective defense that the person accused of violating the securities law, rules, and regulations had no criminal intent as has honestly tried to comply with these multiple bans and that even if a violation occurred, it was not the result of criminal intent but rather an innocent mistake.

In the past, our attorneys have been able to use this technique with great success in both investigative stages, to convince the SEC that no intentional fraud took place, as well as in litigation, where we utilized expert witnesses.

Another applicable defense may be the argument that the statute of limitations has expired. The statute of limitations on securities fraud crimes is five years, which runs from the completion of the crime.

Securities fraud is a serious accusation, which can result in multiple criminal charges. A conviction may result in overwhelming fines and as much as decades in prison. When you are facing a securities fraud investigation and everything you have worked for hangs in the balance, you need a highly skilled attorney at your side, with extensive experience in dealing with the FBI, the SEC, and the National Association of Securities Dealers.

Our New York securities fraud defense lawyers have years of trial experience defending white-collar criminal and security fraud cases. We have the unparalleled knowledge of the complex bureaucracy and intricate regulations that is essential to defending securities fraud cases.

When you are the subject of a federal securities fraud investigation, we will furnish you with a straightforward and knowledgeable assessment of your case. We will not sugarcoat the facts, but we will work with you in crafting the optimal strategy to mitigate the deleterious effects of the investigation on your business and your future career, and to reach the best possible outcome.

The New York investment fraud defense attorneys of Norman Spencer & Associates PC have a wealth of experience representing companies and individuals who have been accused of running what is commonly referred to as Ponzi schemes (similar to pyramid schemes).

A Ponzi scheme, named after Charles Ponzi in the 1920s, is a type of investment fraud where investors receive returns from money invested by subsequent investors and not from any profit earned.

In a nutshell, new investors are attracted by huge short-term returns. In order to ensure returns to prior investors, constant and increasing cash flow of money from new investors is required.

Ponzi schemes that operate on a small level sometimes remain unnoticed by law enforcement agencies. However, as more investors are attracted to the scheme, more new investors are required to keep the pyramid going. Eventually, the scheme will either collapse or will be interceded by the government.

Running a Ponzi scheme or a pyramid scheme is a crime. While Ponzi and pyramid schemes are sometimes investigated and prosecuted on state level, most such cases are investigated and prosecuted by the federal government.

We are experienced in dealing with the FTC and the SEC investigators, as well as the U.S. Department of Justice, the FBI, and the U.S. Postal Inspection Service, while defending federal unregistered securities cases.

Those accused of running a Ponzi scheme are prosecuted under a variety of federal criminal statutes, including mail fraud, securities fraud, money laundering, conspiracy, etc.

Because of the highly publicized Ponzi scheme scandals of the past decade, such cases are prosecuted at the highest levels using virtually unlimited human and financial resources of the federal government.

To defend a pyramid or Ponzi scheme case often requires a team of NYC Securities Fraud Lawyers with all the necessary experience, tenacity, and resources it takes to stand up to the government.

Because of public policies aimed against financial fraud schemes, federal prosecutors are often over-zealous in criminalizing lawful business operations.

The white collar defense lawyers of Norman Spencer Law Group apply aggressive defense techniques for clients accused of these types of investment fraud. We know what separates a pyramid scheme from a legitimate business model.

If you or your company is accused of running a Ponzi scheme, call our New York criminal defense lawyers for a confidential consultation today.

To discuss your options with an experienced New York securities and investment fraud lawyer, contact the offices of Norman Spencer Law Group PC for a prompt and thorough evaluation of your case.