How to Defend Against a Securities Fraud Claim

Securities fraud is a broad term that covers any type of deceptive practice used to mislead investors and manipulate financial markets for personal gain. Those accused of this illegal act can be an individual or organization — either of which will need strong legal representation. Becoming the target of a securities fraud lawsuit can be alarming, to say the least.

Whether you’re part of the business being accused of securities fraud or the investor who has suffered losses as a result of that fraud, you need an experienced securities litigation attorney. Based in San Francisco, attorney David H. Schwartz has been resolving cases of this nature for over 45 years.

Common Allegations of Securities Fraud

When a corporation experiences major investment losses, it can oftentimes be attributed to the natural result of the ups and downs of our financial markets. However, sometimes these losses are the result of deliberate fraud. Differentiating between these two causes of loss can be tricky. While agencies work aggressively to discover and prosecute securities fraud, they too can overreach and ultimately come to the wrong conclusion.

Fraudulent activity can occur in a variety of ways. From financial statements to accounting practices, initial public offerings to takeovers, there are a variety of situations in which corporations are under performance pressure that lead to poor decisions by those invested in its success. Because the legal term “securities fraud” is so broad, investors asserting a long list of accusations within their claim is common.

Fraud by corporations generally involves:

  • Insider trading
  • Market manipulation
  • Misrepresentation or omission in required disclosures (false reporting)

Fraud by individuals (brokers, financial advisors, analysts) usually involves:

  • Churning - the practice of engaging in an excessive number of trades on an investor’s account to rack up commissions
  • Unauthorized trading
  • Recommendation of unsuitable, high-risk, or speculative investments
  • Use of high-pressure sales tactics
  • Misappropriation of funds
  • Failure to invest according to instructions

According to a facts report from the United States Sentencing Commission, in 2017, a whopping 84.8% of securities and investment fraud offenders had little or no prior criminal history. Especially when you have not had a previous run-in with the law, facing a possible legal consequence for corporate fraud or insider trading can be that much more distressing. Whether it’s your business or personal honor on the line, you might ask yourself: How will I be able to protect my professional reputation from long-term damage?

Your Best Defense Against Securities Fraud

When you are accused of fraudulent activity, you could potentially face criminal and civil penalties. But, in order to prove an individual or business entity guilty of securities fraud, the agency or investor initiating the claim must show that the accused intentionally misrepresented or omitted factual information that directly influenced the specific action and consequential losses suffered.

The best way for the accused to fight against such serious accusations is to work with an experienced and knowledgeable business litigation attorney. With a deeper understanding of the complexities these types of cases involve, an experienced attorney can strategically represent you or your company to minimize the long-term effects a lawsuit has on your life.

Experienced Securities Litigation Attorney in San Francisco

With over four decades of experience in securities fraud arbitration and litigation, attorney David H. Schwartz is knowledgeable about all aspects of the complex legalities surrounding securities law. Whether it’s a business or individual in need of legal counsel, it is imperative for you to understand your rights. Proudly serving the legal communities of the San Francisco Bay Area, contact the Law Offices of David H. Schwartz today for a strong defense against securities fraud claims.


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