The Wolf of Wall Street introduced us to the allure of securities trading and the money to be made. But, what happened was not strictly legal, it was securities fraud, and this is what you need to know about the white-collar crime:
Hollywood Dramatized Securities Fraud Crime, Here's The Real Deal Inside Scoop on White Collar Crimes
True crime stories are riveting and dripping with drama, but when Hollywood gets ahold of the story, they can become a tall tale. Although much of the portrayal in the movie The Wolf of Wall Street is true, some creative liberties were taken to spice it up.
Jordan Belfort and his associate pleaded guilty to what is known as a "pump-and-dump" securities fraud scheme (more on what that is later) that cost investors over $200 million. The amount of money they cheated people out of alone is drama enough. So we're naturally drawn to the get rich quick story.
Securities fraud or white-collar crime does not involve physical harm but financial and emotional turmoil. These schemes can wipe out the entire life savings of some people affected.
In general, a securities fraud scheme works by somebody making false statements about a company or its stock value, and then others use that incorrect information to make financial decisions. It's like telling someone that the $20 bill in your pocket is worth $200, and they believe it and purchase said bill for the false value.
What Belfort did is just the tip of the iceberg when it comes to securities fraud. These schemes all have something in common, manipulating the financial markets and deceiving investors. Sometimes, these illegal activities threaten the stability of our commodities and security markets.
Because of these far-reaching effects, securities fraud is a federal crime investigated by the Securities and Exchange Commission, the SEC. So, charges and media attention are as big as a blockbuster movie. And, yes, Maryland and other states have charges for these white-collar crimes, called "Blue Sky Laws." But, the Feds usually try the accused first.
Again, The Wolf of Wall Street showed just one securities fraud. There are lots more.
10 Securities Fraud Schemes the SEC Regularly Investigates
Money has a powerful allure. It can solve many of life's problems and struggles. Unfortunately, money can also lead people to do shady things to obtain it. Like the phrase says, "Money is the root of all evil."
Now, securities fraud is devious, but we wouldn't say evil. People have come up with creative strategies to work with investors and the stock market to their advantage. Some of those plans are considered illegal and immoral, while others are not. We're focused on the ploys that Maryland and the federal government frown upon.
The schemes come in all shapes and sizes; these are the most common securities fraud the SEC investigates:
When it comes to investing, there are many ways someone can be conned out of their money, but was the con a con?
How to Defend Yourself Against Securities Fraud Accusations
Investing is a tricky business. Sometimes money is made, others it is lost. There is risk involved when buying, selling, and trading stocks, commodities, and more. Allegations of unsavory investment tactics will bring the SEC knocking on the door to investigate if any impropriety occurred.
Prosecutors are constantly tasked with the burden of proof in criminal cases. For example, prosecutors must prove beyond a reasonable doubt that the accused intentionally misled or omitted information in a securities fraud case because of the false information investors suffered a financial loss.
So, if it can be proved that the information received by investors was not the cause of the loss, then the case against them falls apart. Your first reasonable defense is to hire a great securities fraud lawyer. Having someone who knows how these SEC investigations go and what to expect can help navigate the long road ahead.
Investigations into securities fraud often take months or years of evidentiary gathering before a case is brought to trial, so the earlier you hire a lawyer, the better. A lawyer protects, guides, and fights for you. In addition, prosecutors often tack on additional charges like bank fraud, wire and mail fraud, computer fraud, tax fraud, RICO, obstruction of justice, and money laundering. An experienced lawyer knows this and is prepared for everything coming your way with a securities fraud investigation.
Besides hiring a lawyer to defend you, here are a few arguments one may use against securities fraud allegations:
Money's attraction can undoubtedly affect someone's rational thinking. The possibility of becoming rich beyond the wildest imagination makes investing glamorous. However, there is an element of gambling when it comes to the stock market. You can win big if you place the right bet but place the wrong one, and poof, the money is up in smoke.
When we strike it rich or find a solid investment, we tend to share the information or strategy that led to the riches. However, just because one person made money does not guarantee someone else will be based on their advice or information.
The big guns, as they say, come out when securities fraud allegations are made, and when the SEC gets involved, it's time to take every precaution to protect you and your family's well-being. Contact JC Law today to see how our team can help with your securities fraud case. A free initial consultation is a start to clarity about your specific situation.