White collar crimes can take different forms, including variations of securities fraud. This is why being completely transparent about the nature of your investments is important. Even a random report containing misleading information can be a type of securities fraud or white collar crime.
Securities fraud can be a company crime
Securities fraud is one of the most common white collar crimes in recent years and one of the costliest. The rise in this type of crime can be due to the internet, which makes it easier for perpetrators to gather information. They might then use the information to commit crimes.
When a company does not report the truth about its current financial information to its shareholders, it counts as securities fraud. This is because it may affect the value of stocks. This can drive people to invest more money in the company. Because the spike in investments is not organic, it may have grave consequences in the future. When the company collapses, investors may receive nothing.
Insider trading is a form of securities fraud
Securities fraud may come in the form of insider trading. It happens when someone with nonpublic, material information about a company uses it to benefit financially, commonly by purchasing or selling securities. Material nonpublic information is any information that could impact stock prices. This could significantly affect an investor’s decision to buy or sell a security that may not have been available to the public.
Consequences of securities fraud
If you face securities fraud charges, you may suffer severe penalties. These may include:
- Substantial fines
- Imprisonment
- Asset forfeiture
- Professional disbarment
Moreover, a conviction can damage your reputation and career prospects.
Facing accusations of committing a white collar crime can be stressful. An experienced attorney can help you understand your rights and explain your legal options.