NY Securities Fraud Attorney

The stakes couldn’t be higher when federal or state prosecutors pursue securities fraud charges. These white-collar cases can result in professional setbacks, prison time, and fines. Whether you’re a financial professional, corporate executive, or individual investor accused of insider trading, market manipulation, or fraudulent investment schemes, you need an attorney who understands securities laws and the aggressive prosecution strategies used.

Our New York securities fraud defense attorneys have proven courtroom experience defending clients against fraud-related charges. We work tirelessly to challenge evidence, negotiate favorable plea agreements when appropriate, and provide strong trial representation when cases go to court.

Don’t face securities fraud allegations alone. The prosecution has unlimited resources and experienced attorneys working against you. Level the playing field with a defense team that knows how to deal with high-stakes cases. Contact us for a free consultation.

Common Types of Securities Fraud We Handle

Insider Trading

Insider trading occurs when individuals trade securities based on material, non-public information, giving them an unfair advantage compared to other investors. While not all insider trading is illegal, violations occur when the information is obtained through breach of duty or misappropriation.

Key Elements Prosecutors Must Prove:

• Material non-public information was used
• The defendant owed a duty of trust or confidence
• The information was misused for trading purposes
• Financial benefit was obtained or a loss avoided

Ponzi and Pyramid Schemes

Ponzi Schemes use funds from new investors to pay earlier participants, creating an illusion of legitimate returns while the perpetrators misappropriate funds for personal use.

A pyramid scheme is a fraudulent business model where participants earn money primarily by recruiting others into the scheme rather than by selling a legitimate product or service. As recruitment continues, the structure becomes unsustainable, and those at the bottom typically lose their investment when the scheme collapses.

Legal Distinctions:

• Ponzi schemes focus on fraudulent investment returns
• Pyramid schemes emphasize the recruitment of new participants
• Both violate federal securities laws and state anti-fraud statutes

Misrepresentation and Material Omissions

Securities laws require full disclosure of all material facts that would influence an investor’s decision. Violations occur through either false statements or the omission of crucial information.

Common scenarios include:

• Inflating revenues
• Hiding liabilities
• Downplaying investment risks or market volatility
• Mischaracterizing the nature of the business or revenue sources
• Failing to disclose regulatory violations or pending investigations.

Broker Misconduct and Fiduciary Violations

Investment advisers owe clients a fiduciary duty of loyalty and care, while broker-dealers must adhere to suitability standards under industry regulations.

Common violations include unauthorized trading, churning, unsuitable recommendations, failure to diversify, and front-running.

Securities Fraud Laws

Securities fraud laws exist at both the federal and state levels, each with its own regulations and penalties.

Securities Act of 1933

This Act requires that investors receive financial information relevant to securities being offered for public sale, and prohibits false representations and other fraud in the sale of securities.

Securities Exchange Act of 1934

This Act enforces federal securities laws and contains provisions to prevent fraudulent activities, including insider trading and manipulation of security prices.

New York General Business Law § 352 (Martin Act)

The Martin Act allows for civil and criminal penalties against those who commit fraud in offering, selling, or purchasing securities.

Penal Law § 190.65 — Scheme to Defraud

This law makes it a crime to engage in systematic conduct with intent to defraud more than one person or to obtain possessions from more than one person by false pretenses, representations, or promises.

Penal Law § 175.45 — Falsifying Business Records

Under this law, falsifying business records with the intent to defraud is a crime. This includes making false entries in business records or altering business records with fraudulent intent.

Potential Penalties and Consequences

Violations of federal securities laws—including insider trading, Ponzi schemes, misrepresentation, material omissions, broker misconduct, and fiduciary breaches—may carry criminal, civil, and regulatory consequences. These may include:

• Criminal Penalties:
  • Up to 25 years imprisonment per count (depending on the offense)
  • Fines up to $5 million for individuals, or twice the gain or loss resulting from the fraud
  • Sentencing enhancements for large-scale or repeat offenses
• Civil Penalties:
  • Disgorgement of profits
    Treble damages (up to three times the profit gained or loss avoided)
  • Restitution to harmed investors
  • SEC penalties and interest.
• Regulatory Consequences:
  • Revocation or suspension of licenses
  • Industry ban
  • Permanent injunctions or cease-and-desist orders

How We Defend Against Securities Fraud Charges

Securities fraud laws are complex, the stakes are high, and the prosecution is aggressive. But at The Law Offices of Mehdi Essmidi, we have the knowledge and experience to build an aggressive defense on your behalf. Here are possible defenses we may adopt:

Challenging the Prosecution’s Case: We scrutinize every aspect of the prosecution’s case. This includes challenging evidence, questioning the credibility of witnesses, and disputing the interpretation of complex financial data.

Building Your Defense: We build a strong defense strategy based on our understanding of your case and the weaknesses in the prosecution’s case. This could involve arguing that you acted in good faith, lacked intent to defraud, or were simply unaware of the fraudulent activities.

Negotiating Plea Agreements: If appropriate, we negotiate plea agreements that can reduce charges or penalties. We only recommend this route if it’s in your best interest, and after discussing all potential outcomes.

Representing You in Court: We provide solid representation if your case goes to trial. We present compelling arguments, cross-examine prosecution witnesses, and work tirelessly to create reasonable doubt about your charges.

Schedule a Confidential Consultation

Securities fraud charges are serious and can have life-changing consequences. But you don’t have to face them alone. NY securities fraud attorney Mehdi Essmidi is committed to providing aggressive defense representation for our clients.

Remember, a charge is not a conviction. With an experienced securities fraud defense attorney on your side, you have a fighting chance. Contact us today to schedule a confidential consultation.

Frequently Asked Questions

Can I face criminal and civil charges for the same securities fraud allegations?

Yes, securities fraud can result in independent proceedings where you face criminal charges in federal courts and civil enforcement actions by the Securities and Exchange Commission. Securities fraud lawyers may coordinate defense strategies across different forums while protecting your Fifth Amendment rights. The outcomes in one proceeding can affect the other, making experienced legal representation crucial.

What are the penalties for violating the Securities Exchange Act?

Violations of the Securities Exchange Act can result in:

• Up to 20 years in federal prison for willful violations
• Fines up to $5 million for individuals
• Criminal forfeiture of ill-gotten gains.
• Civil penalties can include disgorgement of profits, civil monetary penalties, and permanent bars from the securities industry.

Our experienced securities fraud attorneys work to minimize these consequences through negotiation and strategic defense.

How does FINRA’s investigation affect my criminal case?

The Financial Industry Regulatory Authority can run parallel investigations that may impact your criminal defense. FINRA has the power to suspend or bar financial professionals from the securities industry based on its findings. Experienced securities fraud attorneys work carefully to avoid creating inconsistencies that could harm your defense in federal and state courts while protecting your ability to continue working in the financial services industry.

What constitutes insider trading under federal securities laws?

Federal and state laws prohibit insider trading involving securities based on material, non-public information violating a duty of trust or confidence. Our New York securities fraud attorneys defend against allegations involving trading by corporate insiders, misappropriation of information, and tipping schemes.

Can I be charged with securities fraud for working at a brokerage firm?

Employment at brokerage firms doesn’t automatically create criminal liability, but financial professionals can face charges for misconduct, including unauthorized trading, making false statements to clients, or engaging in unsuitable investment schemes.

What defenses are available in securities fraud cases?

Common defenses in securities fraud cases include lack of intent to defraud, good faith reliance on professional advice, and challenging the materiality of alleged misrepresentations. Financial fraud cases often involve transactions where the conduct was consistent with industry standards.

What happens to my professional licenses if I’m charged with securities fraud?

Regulatory matters can result in suspension or permanent bars from the securities industry even before criminal proceedings conclude. The Financial Industry Regulatory Authority can take action based on arrests or indictments.