Securities Violations

Roger E. Naghash is a leading California securities fraud lawyer committed to helping investors and shareholders who are victims of securities fraud. Mr. Naghash has also successfully defended individuals and entities in securities fraud cases brought by a government agency. We are proud to provide the highest quality legal representation in securities fraud cases in Sacramento County and other areas of California.

Securities fraud refers to a wide range of “white-collar” criminal conduct in which a person or company misrepresents information used to make investment decisions. It covers any intentional concealment, omission, or perversion of financial information to cheat or take unfair advantage of investors in violation of federal securities law. Fraudulent misrepresentation includes providing false information, withholding key information, offering bad advice, or acting on inside information, usually causing investors a financial loss. Also known as “investment fraud,” securities violations can manipulate the market and result in million-dollar losses. Examples of securities fraud include:

  • Embezzlement
  • Front running
  • Insider trading
  • False accounting
  • Misrepresentation
  • Stock manipulation
  • Market timing schemes
  • Financial advising fraud
  • Deceptive trading practices

Every year, American investors lose millions of dollars when they fall prey to securities fraud. Whether the fraud involved corporate kickbacks, deceptive trading, or manipulation of the financial market, securities violations often cost innocent investors their life savings and retirement funds. According to recent FBI statistics, crimes involving securities and commodities fraud are on the rise: over 1,500 cased were filed in 2009 alone. The FBI warns consumers to be wary of “high-yield” investments and Ponzi schemes and to report any fraudulent activity involving foreign currencies or hedge funds. The Securities and Exchange Commission (SEC) and National Association of Securities Dealers (NASD) are two government agencies responsible for investigating and prosecuting allegations of securities fraud. Investors and shareholders may also bring a civil action to recover money lost as a result of securities fraud.

Securities violations are governed primarily by federal law. Section 10(b) of the Securities Exchange Act prohibits the use of fraud in connection with the purchase or sale of any security. Rule 10(b)-5 prohibits the making of any false statement or omission in relation to the sale or purchase of securities. According to this rule, the false statement or omission must be “material” in order to be actionable. In other words, it must have been made with the intent to deceive, manipulate, or defraud an investor making an investment decision. Absent intent, reasonable mistakes of fact are not actionable under Rule 10(b)-5.

The Sarbanes-Oxley Act of 2002 also sets forth a number of securities law reforms aimed at increasing financial disclosure and discouraging corporate fraud. Pursuant to Section 401, published financial statements are required to be accurate and presented in a manner that does not contain incorrect statements or omit material information. They must include all material off-balance sheet liabilities to encourage more transparent reporting. Section 802 likewise imposes criminal penalties and up to 20 years of imprisonment for altering, destroying, concealing, or falsifying records “with the intent” to obstruct, impede, or influence a legal investigation.

If you believe you are the victim of securities fraud or if you have been charged with committing securities fraud, the experienced California securities fraud attorneys at the Law Offices of Roger E. Naghash can help. We have helped numerous investors and shareholders recover the money they lost as a result of securities fraud and are committed to helping you obtain the best possible outcome in your case. Our attorneys also have a proven track record of successfully defending companies and officers who were wrongfully charged with securities fraud violations. We are dedicated to defending your reputation and protecting your rights. Call the Law Offices of Roger E. Naghash at (949) 955-1000 for a free consultation.