Securities Laws and Compliance in California
Oct 2 2024 0

Securities Laws and Compliance in California

It is important to be honest when it comes to reporting stocks, bonds, and other financial investments, otherwise known as securities. Securities are strictly regulated and severe repercussions can come as a result of fraud. Securities fraud happens when a person or a business affects securities markets by distributing false information. 

If you were the victim of deceptive practices and were financially harmed, then the Leiva Law Firm can help you. As a Los Angeles business litigation law firm, Leiva Law Firm fully understands the costly impact on Los Angeles businesses that securities fraud can cause. With more than two and a half decades of helping businesses protect themselves and secure accountability after being victimized by fraud, Attorney Marlene Leiva is here for you and prepared to assist you in getting the best legal outcome.

Securities Fraud

Securities Laws and Compliance in CaliforniaSecurities fraud is a very serious thing that can have lasting and catastrophic impacts on the economy. For example, various Ponzi and Pyramid schemes are common. In these scams, there is a need to continuously look for new investors which are the sole source of funding. As new money comes in, it is used to pay early investors over time making it seem like it is a legitimate business opportunity. Eventually, though, as new investors become harder to find, making those payouts becomes impossible and the scam collapses. Ultimately, the investors lose much if not all of their money.

State and federal courts can prosecute individuals or corporations charged with securities fraud. In California, to get a conviction it must be shown that the accused individual or corporation engaged in the unlawful activity willfully and deliberately was committing fraud. Also, it must be demonstrated that the accused individual participated in fraudulent acts or the planning of a fraudulent scheme. This could be by purposely releasing misleading information or withholding information that would affect securities markets.

The penalties for securities fraud in California can include any one of the following or a combination of them:

  • A fine of up to $10,000,000.
  • Imprisonment in a state prison for as little as two years to as many as five years.
  • A conviction of securities fraud for an issuer of securities can face a fine as high as $25,000,000.

While there are instances where premeditated securities fraud activities may account for a securities fraud charge and conviction, there are also times when this is not so. Many different professionals may be charged with securities fraud. Mistakes do happen that result in criminal charges. Consider a financial advisor who unwittingly gives bad advice to a client. In this scenario, the financial advisor could find themself in trouble for securities fraud. However, even though this is true, if the bad advice was simply poor judgment and an unintentional mistake then this can be an effective defense against a conviction.

Speak to an Attorney at Leiva Law Firm Today

California securities fraud cases can be highly complicated. Having an attorney help you with your case can be beneficial. For assistance with a securities fraud case in California, you are welcome to call Leiva Law Firm today at (818) 519-4465. 

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