Securities fraud comes in many shapes and sizes. In fact, it is so varied that some people may not even understand all of the illegal activities that fall under this category. You may not even know that what you did was illegal in the first place.
It is important to understand different types of securities fraud. This can prepare you if you face charges for such crimes.
Examples of securities fraud
The Federal Bureau of Investigation (FBI) gives tips to promote securities fraud awareness. In it, they discuss different types of securities fraud. These crimes involve the manipulation of financial markets or the deception of investors. For example, insider trading is one of the most common types of securities fraud. This happens if you use employee insider information to make stock market decisions before the public gets hold of the knowledge.
Other potential examples include:
- Ponzi and pyramid schemes
- High yield investment fraud
- Foreign currency fraud
- Broker embezzlement
- Late day trading
- Hedge fund related fraud
- Advance fee schemes
Many of these involve the partial manipulation of the investors involved. This can lead to large financial losses on the part of the investor(s). Because of this, the FBI takes securities fraud crimes seriously.
Potential repercussions for conviction
If convicted of a securities fraud charge, you will face steep fines and potential jail time. For example, the maximum prison sentence for insider trading is 20 years. Individuals can face fines of a maximum of $5,000,000 as an individual. Non-natural persons may face fines of up to $25,000,000.
Needless to say, if facing securities fraud charges, you want to treat it like the potential risk to your future that it is. Consider seeking legal counsel immediately.