Securities Fraud Lawyer

Securities fraud is the federal crime of using false statements, deception, or manipulation in connection with the buying or selling of stocks, bonds, or other investments, and it is prosecuted in New York City by some of the most sophisticated federal prosecutors in the country, frequently alongside a parallel SEC enforcement action. These cases carry decades of potential prison time, enormous fines, disgorgement, and industry bars, and they are built on complex financial records and expert testimony. Because securities fraud turns on proving intent to deceive, it is often defensible, but only with the right lawyer and an early start. If you are under investigation or charged, an experienced securities fraud attorney should be your first call.

Varghese & Associates, P.C. is a federal criminal defense firm on Wall Street, in the heart of the Southern District of New York, the most active securities-fraud jurisdiction in the nation. Securities fraud is a core part of our federal fraud defense practice, and the firm is led by Vinoo Varghese, a former prosecutor and one of the most recognized criminal defense attorneys in the country. Our securities fraud attorneys handle these cases in house, from the first SEC subpoena through investigation, indictment, trial, sentencing, and appeal. Matters are not routed out to other firms.

Call now for a confidential consultation with a New York City securities fraud lawyer. The earlier our securities fraud defense lawyers are involved, the more they can do.

What Is Securities Fraud?

Securities fraud is any scheme to deceive investors or manipulate the financial markets in connection with the purchase or sale of a security, including making false statements, omitting material facts, insider trading, or manipulating a stock's price. A security includes stocks, bonds, options, and many investment contracts. The defining element of securities fraud is scienter, meaning the government must prove you acted with intent to deceive or with reckless disregard for the truth, not that you made an honest error or a good-faith prediction that did not pan out. That intent requirement is where an experienced securities fraud attorney concentrates the defense.

What Are the Types of Securities Fraud?

The main types of securities fraud are insider trading, market manipulation, accounting and disclosure fraud, and investment schemes such as Ponzi and pump-and-dump operations. Each is charged and defended differently:

• Insider trading, trading on material nonpublic information or tipping someone who does. Read more on our insider trading defense page.
• Market manipulation, artificially affecting a security's price or volume, including pump-and-dump and spoofing schemes.
• Accounting and disclosure fraud, misstating a company's financial condition in filings or to investors.
• Investment fraud, including Ponzi schemes, affinity fraud, and misrepresenting how investor money will be used.
• Broker and adviser fraud, churning, unauthorized trading, or misrepresenting investments to clients.

Securities Fraud and the Statutes Behind It

Securities fraud is charged under a group of federal statutes and regulations, and prosecutors often use several at once alongside wire fraud and conspiracy. The provisions most often in play include:

• Securities fraud under the Securities Exchange Act, Section 10(b) and Rule 10b-5 (15 U.S.C. § 78j(b); 17 C.F.R. § 240.10b-5)
• Willful violations of the Securities Exchange Act (15 U.S.C. § 78ff)
• Securities and commodities fraud (18 U.S.C. § 1348)
• Fraud in the offer or sale of securities under the Securities Act, Section 17(a) (15 U.S.C. § 77q)
• Wire fraud, frequently charged alongside the securities counts (18 U.S.C. § 1343)
• Conspiracy (18 U.S.C. §§ 371 and 1349)
• Money laundering of the alleged proceeds (18 U.S.C. §§ 1956 and 1957)

What Happens When the SEC Investigates at the Same Time?

Securities fraud cases frequently involve parallel proceedings, meaning a criminal case brought by the U.S. Attorney's Office runs at the same time as a civil enforcement action by the Securities and Exchange Commission, and a move in one can seriously damage the other. Testimony or documents given to the SEC can be handed to criminal prosecutors, and a civil settlement can be treated as an admission in the criminal case. Coordinating the defense across both tracks, and protecting your Fifth Amendment rights throughout, is one of the most important and most technical parts of securities fraud defense, and it is a core focus of our securities fraud attorneys.

What Are the Penalties for Securities Fraud?

Securities fraud carries up to 25 years in federal prison per count under the securities and commodities fraud statute, and up to 20 years and a fine of up to $5 million for an individual under the Securities Exchange Act, along with disgorgement, restitution, forfeiture, and a bar from the securities industry. Because each transaction or filing can be charged as a separate count, exposure can multiply quickly, and the civil SEC case can add its own penalties and injunctions. The severity of these consequences, and the reputational damage of a securities-fraud charge, is exactly why an experienced securities fraud attorney should be involved as early as possible.

How Does Sentencing Work in a Securities Fraud Case?

Federal securities fraud sentences are calculated under the United States Sentencing Guidelines, where the single biggest driver is usually the dollar amount of the loss or the gain from the scheme, along with the number of victims and the sophistication of the conduct. Because loss and gain drive so much of the range, one of the most valuable fights in a securities fraud case is over how those figures are calculated, and the government's numbers are often inflated or wrongly attributed, especially where market forces rather than the defendant caused a price change. Our securities fraud attorneys challenge the loss and gain calculations, contest enhancements, present detailed mitigation, and argue for a sentence below the guideline range.

What Are the Defenses to a Securities Fraud Charge?

Securities fraud turns on intent, and that is where the defenses concentrate. Every case is different, but the strategies our securities fraud lawyers commonly use include:

• No intent to defraud. Securities fraud requires scienter, an intent to deceive or reckless disregard for the truth. A good-faith business judgment, an honest projection, or a mistake is not fraud.
• No material misstatement or omission. The government must prove a misstatement or omission that a reasonable investor would consider important, not a minor or immaterial detail.
• Reliance on professionals. Good-faith reliance on the advice of lawyers, accountants, or auditors can negate the intent the government must prove.
• No material nonpublic information. In insider trading cases, showing the information was public, immaterial, or not the basis for the trade can defeat the charge.
• Loss causation and market forces. Expert analysis can show that the market, not the defendant, moved the price, undercutting both liability and the loss calculation.
• Suppression. Where evidence was obtained through an unlawful search, subpoena, or seizure, our attorneys move to suppress under the Fourth Amendment.

What Should You Do If You Are Under Investigation for Securities Fraud?

If you learn you are under investigation for securities fraud, do not respond to an SEC subpoena or testify without counsel, do not talk to federal agents, and do not alter, delete, or destroy any documents, emails, or trading records. Call a securities fraud attorney immediately. Anything you say, including in SEC testimony, can be used in a parallel criminal case, and destroying records after you know about an investigation can turn a defensible case into an obstruction charge. You have the right to remain silent under the Fifth Amendment and the right to counsel. Preserve everything, say nothing without counsel, and let your lawyer engage the SEC and the prosecutors.

How Our Securities Fraud Attorneys Can Help You

Our securities fraud defense lawyers defend these cases at every stage, and they look for the earliest possible point at which the case can be won or shrunk:

• Early intervention. Responding to SEC subpoenas and Wells notices, grand jury subpoenas, and target letters, handling proffers, and negotiating with the U.S. Attorney's Office to seek a declination or reduced charges before an indictment is filed.
• Parallel-proceedings strategy. Coordinating the defense across the criminal case and the SEC civil action while protecting your Fifth Amendment rights.
• Financial and expert analysis. Working with forensic accountants and market experts to test the government's loss, gain, and causation theories.
• Motion practice. Moving to dismiss defective counts, suppressing unlawfully obtained evidence, and limiting the government's proof.
• Trial. Trying cases before federal judges and juries in the Southern District, the Eastern District, and other districts as engaged, which is exactly why the firm prepares every case for trial from the start.
• Sentencing and appeal. Challenging the loss and gain calculations, arguing for variances, defending against disgorgement and forfeiture, and pursuing appeals.

Is Securities Fraud a Felony?

Yes. Federal securities fraud is a felony, punishable by up to 25 years in prison per count under the securities and commodities fraud statute, along with heavy fines, disgorgement, restitution, forfeiture, and a securities-industry bar. There is no misdemeanor version of federal securities fraud. Even a first offense is a serious felony that can end a career in finance and carry substantial prison time, which is why every securities fraud allegation should be treated as serious from the start.

What Is the Difference Between Securities Fraud and Insider Trading?

Insider trading is one specific type of securities fraud, trading on material nonpublic information or tipping someone who does, while securities fraud is the broader category that also covers market manipulation, accounting fraud, and investment schemes. Both are prosecuted under the same core statutes and both draw parallel SEC actions. Because the defenses differ by type, it matters that your federal white collar crime lawyer understands the specific theory being charged. You can read more on our insider trading defense page.

Can a Securities Fraud Charge Be Dismissed Before Trial?

Yes. A securities fraud charge can be dismissed before trial through a motion to dismiss a legally defective indictment, a successful suppression motion that removes key evidence, or negotiation that leads the prosecutor to drop or reduce charges. Because securities fraud depends on proving intent, materiality, and causation across complex records, these cases are often more vulnerable than they first appear. Dismissals are never guaranteed, but they are far more likely when a securities fraud attorney is involved early and challenges the government's theory before it hardens.

How Much Does It Cost to Hire a Securities Fraud Lawyer in New York City?

The cost of a securities fraud lawyer in New York City depends on the complexity of the alleged scheme, the volume of trading and financial records, whether the SEC is running a parallel case, and whether the matter resolves before or goes to trial. Securities fraud cases involve extensive discovery review, forensic accounting, and expert analysis, so they require real work. Our securities fraud attorneys are transparent about fees from the first conversation and structure the representation to fit the matter. Given the decades of exposure and the industry bar at stake, the more important question is usually what an inadequate defense can cost you.

A Securities Fraud Attorney the National Media Turns To

When the biggest federal financial cases in the country are in the news, networks and newspapers call Vinoo Varghese to explain what is really happening in the courtroom. That is the same judgment and credibility our securities fraud attorneys bring to your case.

Vinoo Varghese has provided legal analysis and commentary for CBS News, Fox News, Fox Business, CNN, MSNBC, Court TV, HLN, BBC, Inside Edition, i24 News, Sky News Arabia, and Nancy Grace's Crime Stories, and has hosted true-crime legal analysis for Vanity Fair. He has been quoted as a legal authority by The New York Times, The Wall Street Journal, the New York Law Journal, Law360, the New York Daily News, and the New York Post. A former prosecutor from the Brooklyn District Attorney's Office, he is a nine-time National Trial Lawyers Top 100 honoree, an eight-time New York Metro Super Lawyer, rated AV Preeminent by Martindale-Hubbell, and has served on the visiting faculty of Harvard Law School's Trial Advocacy Workshop.

Contact a New York City Securities Fraud Lawyer Now

If you are under federal investigation, have received an SEC subpoena or a target letter, or have been charged with securities fraud anywhere in New York City, do not wait and do not talk to anyone but your lawyer. Securities fraud is part of our broader federal fraud defense practice, and a securities fraud attorney who has stood in the courtroom and tried the cases can change what happens next.

Call Varghese & Associates, P.C. for a confidential consultation. Our office is located at 2 Wall Street, Suite 310, New York, NY 10005, steps from the federal courthouses of the Southern District of New York.