Federal Securities Fraud“A conviction for Securities Fraud will carry a lengthy prison sentence.”
Securities Fraud covers a wide range of illegal activities that involve the deception of investors or the manipulation of financial markets. The most commonly prosecuted acts of Securities Fraud include insider trading, broker misrepresentation, stock churning, and ponzi schemes.
Definition of Federal Securities FraudUnder the Securities Act of 1933 and the Securities Exchange Act of 1934, Securities Fraud is defined as willfully engaging in deceptive practices intended to manipulate financial markets or induce investors to make financial investment decisions based on deceptive or false information...
“Securities” are broadly defined as any form of investment, such as stocks, bonds, bank notes, commodities, investment contracts, and options.
Conspiracy to Commit Securities Fraud
Conspiracy to Commit Securities Fraud occurs when two or more people work together to engage in the manipulation of financial markets or fraudulently induce investors to make financial decisions.
Importantly, Conspiracy to Commit Securities Fraud can, and usually is, charged against minor participants in securities fraud scheme.
The government charges minor participants with Conspiracy to Commit Securities Fraud because under 18 U.S.C. § 371, the penalties for Conspiracy to Commit Securities Fraud are the same as actual Securities Fraud, which results in minor participants cutting deals to testify against major participants in order to avoid the severe penalties Securities Fraud carries.
Penalties for Securities FraudUnder federal law, the crime of Securities Fraud is a Class C felony, punishable by up to twenty years in prison, three years of supervised release, and $5 million in fines. Additionally, disgorgement of any profits will be ordered and any property obtained from the proceeds of the offense can be confiscated.
Under the United States Sentencing Commission, Guidelines Manual, §2B1, a person convicted of Securities Fraud would be assigned a base offense level between 6-36, which carries a guideline range of probation up to 33 months in prison before taking into account any aggravating or mitigating circumstances.
Importantly, probation is rarely given in federal cases and the amount of loss or aggravating offense characteristics associated with a particular Securities Fraud case can result in a significantly greater prison sentence than 33 months in prison.
As of 2018, the average federal sentence imposed for Securities Fraud fell between 20-24 months in prison.  . . . [More]