Securities fraud involves misrepresenting information about an investment to profit from its sale or purchase. Insider trading, artificially driving up stock prices, and Ponzi schemes also fall under securities fraud laws. Those facing these serious charges need the guidance of experienced securities fraud attorneys who have knowledge of the applicable federal and state regulations and prosecuting agencies. These are some of the most common defenses that may apply in your case.
4 Common Defenses Securities Fraud Attorneys May Use in Your Case
1. Lack of Evidence
The defense may argue that the prosecution failed to show beyond a reasonable doubt that you committed securities fraud. They must prove that you made serious misrepresentations or omissions of material facts. You can use this defense if the prosecution cannot produce evidence that meets the burden of proof.
Your attorney can answer your questions about the evidence so you can learn more about the case against you. They will build a defense with documentation such as financial records, witness statements, internal documents, and electronic communications.
2. Good Faith
Your attorney can also contend that you made false promises and statements in good faith. In other words, you had a reasonable belief that you were speaking the truth and representing the investment fairly. For example, you can prove that you consulted with legal or financial experts during the course of the transaction to ensure its validity.
The defense must prove you intended to commit fraud to successfully prosecute a securities fraud case. They may argue that as a financial professional, you should have known you were providing false or misleading information. To refute these statements, your attorney will show that you lacked awareness, made honest mistakes, or received incorrect information about the questionable securities from a trustworthy source.
3. Problems With the Chain of Custody
Chain of custody refers to documentation of evidence handling throughout your case. The prosecution must display a clear chain of custody from evidence collection until the day they show it in court. When issues exist with the chain of custody, your attorney could argue that someone mishandled, lost, or tampered with the evidence.
4. Due Diligence
You may be able to defend against these allegations by showing that the accusing party performed the necessary due diligence. If they researched the investment and did not find anything unusual about the proposed transaction, the attorney can argue in favor of the good faith nature of your actions.
You will receive a Wells Notice from the Securities and Exchange Commission to provide official notification of an investigation and potential fraud charges. Seek legal advice immediately in this situation to begin building a strong defense. Your attorney can also respond to this notice and other SEC violations on your behalf. They will advise on the best course of action based on the existing evidence against you. Some cases settle out of court while others require a jury trial.
