California Securities Fraud Laws

201912.31

Sometimes people may be facing securities fraud charges. If you are facing securities fraud charges under California Corporations Code Section 25400, California Corporations Code Section 25402, or California Corporations Code Section 25540 you might be temporarily behind bars. In that case, it is helpful to have someone on your side who can offer assistance with bonds and help you get out of this jam. Knowing what constitutes this issue under law is the first step to moving past this problem and getting it solved. An understanding of the law is imperative if you are facing an issue of this kind.

The Terms Used

One of the most important things to know before you begin is what this term means. Most people have at least a few financial investments. Many people invest their savings in stocks and bonds. These are collectively known by the term securities. When someone is accused of engaging in what is known as securities fraud, they are using a means of manipulating these investments in some way. For example, they might provide misleading information about the price of a given stock or bond. They also might report a loss as a profit to the IRS or to people who are looking to invest in a given area of the market. This action can take place on a relatively small scale. For example, a single stockbroker might provide misleading information to a single client. A corporation and those who own or run it may also choose to provide inaccurate information about financial investments to a large group of clients. A single person may be facing charges or many people who run the company may be accused of a much greater series of actions intended to deceive a great many people.

Prosecution For These Crimes

People may be accused of securities violations both in state courts and federal courts. Defendants who are facing problems in California should be aware of the kind of standards required for prosecution. The prosecutor must be able to show that the defendant acted willfully and then deliberately, recklessly or intentionally broke the state’s laws governing securities. In order to do this, most prosecutors will need to show that the people charged actually understood the laws before they broke them. This means that the prosecutor may face a heavy burden before they are able to get the defendant charged and then an even heavier burden if they wish to see them convicted.

Plans and Penalties

Under the laws that govern this issue in the state of California, the state must generally prove that the defendants were part of a larger scheme that was intended to defraud others. This kind of action may have taken place during any part of the securities process including the offering to the public, the sale of specific securities and the final purchase. The California prosecutor may also decide to show that the defendants allowed false statements to be released. People can also be accused and convicted if they knew information about a given security but made the decision to withhold it from the public at large. If this is the accusation, the prosecutor must demonstrate the facts presented are demonstrably false and this was known by the defendants at the time.

Securities fraud penalties may take several forms if someone is found guilty under a court of law. Financial penalties can include large fines that the defendant is expected to make good over time as part of recompense for the fraud they carried out. Even minor securities fraud penalties may result in all kinds of serious consequences for the defendant. For example, someone may be forced to pay financial penalties that exceed the cost of the profit allegedly made from the fraud. They may also face many other unwanted consequences that can force them out of the security sales industry. For example, they may be barred from ever participating in any kind of securities related activities in the future. A person may be charged as an individual. The same is true of companies. Those who ran the company or owned it may be forced out of the business if they have been convicted of this behavior.