Any crime that affects financial markets is considered a big deal and not something the federal government is going to treat lightly. Securities fraud comes in several forms, all of which are considered major criminal offenses. Michigan residents who find themselves facing federal charges related to securities fraud may face significant consequences if they are ultimately convicted.
Type number one: Insider trading
Insider trading is the form of securities fraud most people hear about. It occurs when a person with confidential financial information about a company uses that information to buy or sell stock. This will either save or make them a great deal of money.
Type number two: Fraud by a company
Securities fraud is committed by a company when the financial information it reports is purposely inaccurate. A business might do this to make it look like it is doing better than it actually is, encouraging people to buy its stock. It may boost stock performance for a moment, but as the company is not really performing well, it generally causes investors to lose their investment.
Type number three: Third-party misrepresentation
This is sometimes referred to as a pump and dump scheme. It is where a third party purchases cheap stock in an unknown company then gives out information encouraging others to buy. The goal is to pump up the stock value. Then, when that occurs, they sell for a profit.
Securities fraud doesn’t just help the person or company committing it. It harms other investors. As the money and damages involved are often significant and far-reaching, securities fraud is not a crime that the federal government will let slide by. Fighting criminal charges of or related to securities fraud can prove a challenging feat; however, Michigan residents can turn to an attorney with experience handling such cases. With the right person in one’s corner, the best outcome possible can be achieved.