Investment Fraud

Investment fraud, a type of white-collar crime, can involve a variety of different situations. If you’re facing charges associated with investment fraud, you need to contact a lawyer with proven white-collar case experience as soon as possible to get the ball rolling on your defense. These cases are complex and can involve weeks, months or longer of investigative efforts. Since there are so many federal rules and regulations involved, it’s important to contact a lawyer as soon as possible if you’re under investigation or if you’ve been arrested and are facing charges. Listed below are some common types of investment fraud.

Types of Investment Fraud

Churning

Churning is basically when a stockbroker buys or sells securities to gain additional commissions for their personal gain. This essentially amounts to excessive trading for personal wealth enhancement. This is an illegal tactic is characterized by an excessive amount of trades which generates a high number of commissions for the broker in question. 

Ponzi Schemes 

Ponzi schemes are what typical come to mind when one thinks about investment fraud. We all remember some of the high-profile cases during the big financial crisis. A ponzi scheme usually involves an investment operation that is completely fraudulent. This scheme will pay investors from their own money or from the funds of other investors. There isn’t usually any profit made off of the fraudulent promised investment. It does however, involve large monetary gains to whoever has organized the scheme. If you’re facing ponzi scheme charges, you need to get with a criminal defense attorney immediately.

Not Practicing Due Diligence 

In some cases, it may be possible to face investment fraud charges for failing to practice due diligence for clients. Investment firm clients are counting on their brokers to conduct the appropriate and lawful amount of due diligence expected of them. If a client loses a lot of money, because a broker failed to practice appropriate due diligence, there could be criminal investment fraud charges involved. Because it’s sometimes impossible to foresee certain financial futures, these cases can be difficult. Your first priority after any type of investment fraud charges associated with a lack of due diligence needs to be getting into contact with an experienced white-collar criminal defense lawyer.

Insider Trading

Insider trading is another one of the more sensational forms of investment fraud. Insider trading happens when stocks, securities or other investments are traded between individuals with access to information that isn’t public. These cases deal with privileged or secret information, not made public to ordinary and lawful investors. Trading using insider information can mean illegal windfalls for brokers and investors. It can also mean prison time. The federal government takes these charges very seriously.

Penalties Associated with Investment Fraud

Although charges associated with investment fraud are almost always non-violent in nature, the penalties associated with them can be very harsh. We’ve seen serious cracking down on white-collar crimes across the board. Depending upon the unique circumstances of your individual case, you could be facing up to five years in prison, or more, if convicted. These are felony charges. They can carry a very great impact on your ability to work and earn a living after you get out of prison too. An investment fraud conviction can mean the loss of your professional licensing and livelihood. Charges associated with ethical issues and fraud can keep you from getting on with your life after a case. Since the penalties associated with investment fraud charges are so hefty, it’s essential to get in touch with a lawyer as soon as you’re under investigation.