Securities Fraud

P.T. Barnum opined that there was a "sucker born every minute." It's a rather cynical look at the world, but there's a little truth behind the statement. After all, human nature being what it is, people are always looking for their "big break", and that includes when they play the stock market. Thus, many are unwittingly drawn into the world of securities fraud.

With the proliferation of investment "opportunities" touted on the Internet every day, it's no surprise that con artists adore the cyber medium. By using the World Wide Web, they can commit their securities fraud schemes with veritable anonymity. Through email and websites, they can lure thousands of unsuspecting people into forking over millions (if not billions) of dollars each year. These securities fraud cons get rich, and their prey gradually (or not) lose their savings.

Ironically, the securities fraud con games haven't changed over the years. Ponzi and pyramid schemes are as popular as ever, even though most people have heard about them. Affinity fraud, used many times via the web, is still going strong. And penny stocks are still bought and sold by unsuspecting victims. Yes, securities fraud is alive and well.

Although the U.S. Securities and Exchange Commission (SEC) tries to prosecute as many cases of securities fraud each year as it can, it can only do so much without the help of people who have been defrauded by con artists. However, too many people who have fallen for securities fraud scams are embarrassed at having been "taken for a ride", and are therefore reluctant to come forward.

Our law firm understands how difficult it can be to admit that you fell for a scheme. However, it's critical that you do. After all, the faster we can take a con artist off the street, the better it will be for the public in general.

Please contact our office today if you've been the victim of a securities fraud scheme. With our legal representation, you may be able to recover some, if not all, of the money that you lost. Best of all, you'll be taking another scammer off the cyber "streets".

Remember: just because you fell victim to a securities fraud once doesn't mean you have to be a victim forever. Let's send a message to all the securities fraud criminals operating on and off the web - we're mad and we're not going to take it any more.

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Securities Fraud News

Eight people, who are former employees of the brokerage firm Hampton Porter Investment bankers, which is no longer in business, have been indicted by a federal grand jury in California for securities fraud. Charges state that the eight defendants where involved in a scheme where investors were cheated out of around $5,000,000, and prosecutors, as well as the grand jury, believe that there is a clear cut case of securities fraud.

All of the defendants are residents of California and range in age from 38 to 47. All the defendants were charged with nineteen counts of securities fraud and conspiracy to commit securities fraud. Two of the defendants have already pled guilty, and are cooperating with government officials. In addition to the blanket charges, one defendant is also charged with making false statements to agents of the Federal Bureau of Investigation, and another defendant is charged with money laundering.

The stocks that were involved in the securities fraud scheme were initially low-priced "penny stocks." Brokers at Hampton Porter Investment Bankers pressured clients to invest in these stocks, using tactics that were of a deceptive nature. The brokers allegedly received financial incentives for pushing the sale of these penny stocks. Once they got enough clients to invest in the penny stocks, the prices of the stocks then went up, and the brokers sold for a high profit. The brokers used several unscrupulous tactics to prevent their clients from selling shares of the penny stocks. Most of the time, when brokers were instructed by a client to sell the penny stock shares, they would delay doing so for as long as possible, or at worst they simply would not follow the instructions. This type of blatant misconduct by the brokers was a clear-cut case of securities fraud, and the evidence was strong enough to receive an immediate grand jury indictment. Clients that were unwittingly involved in the securities fraud are being asked to come forward to make the case even stronger, as well as to file civil suits to regain the money they had lost through the securities fraud scheme.

The Federal Bureau of Investigation did all of the investigation and research on the securities fraud case, and the case will be prosecuted in the Central District of California. The defendants had worked at Hampton Porter Investment Bankers from 1998 until the year 2000, and it was during their time of employment that the securities fraud scheme occurred.

Securities Fraud Statistics

As of September of 2005, the Corporate Fraud task force, a division of the United States government that was started in the year 2002, released some securities fraud statistics that were, at the very least, alarming. These securities fraud statistics showed that the problem is alive and well, and another reason why those who invest through brokers must be diligent in watching what is happening with their stock accounts. The securities fraud statistics presented by the government, however, did show that the implementation of the Corporate Fraud Task Force was definitely making a difference. Corporate fraud was being investigated and prosecuted. Since the implementation of the Corporate Fraud Task Force, there have been over seven hundred corporate fraud convictions. The securities fraud statistics show that within these convictions, over 100 corporate CEOs, including corporation presidents were indicted and prosecuted. Also convicted of securities fraud were over 80 corporate vice presidents and 30 CFOs. All in all, over 1300 were charged, and fortunately over $266 million dollars was recovered through forfeitures, fines, and restitution.

Large and small individual investors alike need to be aware of these securities fraud statistics, and need to realize that, despite efforts to investigate and prosecute all cases of securities fraud, the practice is still going on. How then, can the average investor protect themselves from being the victims of securities fraud? Investors need to stay on top of securities fraud statistics, and also need to investigate beyond these statistics. Some research on the corporation that an investor is dealing with or considering dealing with should be a given; don't simply go with the first company that you find. Researching the latest securities fraud statistics should not only alert potential investors to problems, but digging deeper should uncover who the major corporate culprits have been. Investors should read all the news pertaining to securities fraud, and also contact government agencies that can give them the details pertaining to securities fraud statistics. Investors should also report any unusual activity that pertains to their accounts that might be potential securities fraud, so an investigation can be done. If an investor becomes a victim of securities fraud, he or she should start immediate litigation. Aggressive prosecution of, and civil action against, companies and individuals who engage in securities fraud can help make future securities fraud statistics less alarming.

Securities Fraud Statutes of Limitations

Securities fraud statutes of limitations are subject to the same rules as the statutes of limitations on any other legal matters; there are certain set time limits for filing claims. Securities fraud statutes of limitations can differ depending on the complaint, but one of the biggest pluses for defendants in securities fraud cases is that sometimes it can take a long time to uncover the fraud. However, in many instances the securities fraud statutes of limitations will not come into effect until after the investor, or investigators, have discovered the fraud, making it possible to instigate civil action within the time allotted. It is possible for the securities fraud statutes of limitations to also be considered by arbitration in many cases, which can work to the plaintiff's benefit. The Supreme Court has upheld Section 10b of the Securities Exchange Act of 1934, however, which states that action must be taken within a year of discovery of the securities fraud, and within three years of the security fraud itself.

Securities fraud statutes of limitations can differ from state to state. Some states allow up to six years to prosecute a case of securities fraud after the securities fraud took place, other states set a strict time limitation only for after discovery. There are some State Consumer Protection Acts that include securities fraud, and some that don't. This can have a distinct bearing on securities fraud statutes of limitations. It is essential that anyone who has discovered securities fraud that has directly affected their finances seek the advice of a lawyer who specializes in securities fraud to find out where the case stands as far as the statute of limitations. It is important that this lawyer either specialize in securities fraud, or can consult with others who do.

The importance of prosecuting and taking civil action against those who have engaged in securities fraud cannot be understated. Even if an individual only suspects that he or she has been the victim of securities fraud, he or she should contact a lawyer, as well as other legal authorities. Knowing what signs to look for when it comes to securities fraud is helpful also, as this type of fraud can often remain concealed for a long period of time, thus working against victims when it comes to securities fraud statutes of limitations. A lawyer who specializes in securities fraud will be knowledgeable about the particular state laws concerning securities fraud statutes of limitations, as well as federal laws. Working within state and federal laws and following all guidelines concerning securities fraud statutes of limitations can mean the difference between a financial recovery and an unrecoverable financial loss. Contacting the proper legal authorities when securities fraud is suspected can also make a big difference - the individual may be wrong in his or her suspicions, but if he or she feels an investigation is warranted then it is never wrong to bring the suspicions to light.