Is it tempting to destroy your accounting records and supporting documents when you are being investigated for securities fraud? You bet. Physical evidence such as accounting records is probably one of the most crucial evidence available to legal enforcement in white-collar crime cases. It is also, the first thing the investigator will seek out in a securities fraud investigation.

But, this does not mean you should hit the delete button as soon as a Securities Exchange Commission (SEC) investigator contacted you. The process is far more complicated than that, and by attempting to destroy your relevant documents, you risk the additional charge of obstruction of justice, which has a maximum of ten years of incarceration.

In addition, the destruction of documents can make it substantially more difficult to defend you in a criminal investigation and a civil litigation suit.

Federal prosecutors, who are later referred to this matter, are allowed to make estimates on how much money is defrauded based on the evidence available. Most often at times, because the supporting documents are not available, the estimate can be considerably more than what is actually defrauded.

The Rule of Thumb:

Do not voluntarily give up information without a warrant, and without first seeking advice from a Federal Criminal Defense attorney.

If you have been presented with a search warrant by a SEC investigator regarding your accounting records, then call our Long Island Securities Fraud Criminal Defense Lawyers at (516)-204-7611 for professional legal advice.

A Securities and Exchange Commission (SEC) enforcement investigation can be triggered by a number of factors, but some of the more common instigators in a securities fraud investigation are:

• Referrals from other SEC divisions or offices, such as the Office of Compliance Inspections and Examinations and the Division of Corporation Finance
• Self-reporting by the company’s private investigation unit to the SEC. Often at times, companies would decide to report an employee to the SEC for having engaged in improper trading practices that may be of potential interest to the SEC.
• Other SEC investigations on other or branched companies.

Following the internal SEC guidelines, a matter that is under review does not become an investigation until the Enforcement Staff within the SEC and its associate director evaluate the situation and convert the inquiry into an investigation on a more specific entity.

As part of the initial assessment of the potential case, the Enforcement Staff usually seek the voluntary production of documents, information and witnesses. As part of the standard procedure, the investigator sends a letter requesting the voluntary production of certain documents and information. Sometimes, the investigator would stray away from their usual investigative routine and telephone a senior officer or staff, asking questions.

In these situations, you should not hang up on the investigator, instead, you should take detailed notes of the questions ask without giving away any answers, and call a federal criminal defense attorney right away.

Sometimes, receiving a phone call from an investigator does not immediately mean you are being investigated for a crime; they could be just simply question you as a witness or a victim. But in any case, it is important for those who are contacted by an SEC Enforcement Investigator to seek legal advice from a skillful federal criminal defense attorney because you never know when you make a self-incriminating statement to an investigator.

If you have received a call or a letter from a SEC Enforcement Investigator for suspicions of securities fraud, then call our securities fraud defense attorneys at (516) 204-7611 to get professional legal advice.

Parking generally involves a sale of securities with no change in beneficial ownership. The trade is made with the understanding that the actual owner takes in all the risk of any gain or loss after the transferred position. The temporary owner is supposed to be reimbursed for all the costs incurred during the holding.

Parking is not necessarily illegal

Unless, the act is done for an improper purpose such as to obscure margin or net capital problems, prevent the triggering of certain reporting requirements, or disguise the identity of the actual owner of the stock, then the act of Parking does not encompass the possibility of criminal charges for securities fraud.

For example:

If the actual owner of the stock misrepresents the source of funds used to buy the common stock and is secretly accumulating the stock through a nominee, all while misrepresenting the nature of the purpose to the U.S. Securities and Exchange Commission, the actual owner may be criminally liable for parking.

On Schedule (D) of the form filed with the SEC, the owner must reveal the nature of stock purchases. Many those who are targeted by the federal prosecutor’s office are those who misrepresented the stock and listed that it was brought with personal funds, when in fact, the funds were raised from other investors holding profit-sharing agreements.

Depending on the facts of the case, the criminal liabilities you may face for securities fraud is expensive in fines and restitution and crippling since such actions can carry up to 20 years of incarceration. It is thus important for you to contact a skillful and experienced federal criminal defense at the onset of the investigation.

Although most defendants may not know of the investigation until the very end (arrest warrant), it is still advisable for you to exercise your 5^th and talk to an attorney instead.

If you are recently being investigated or charged with securities fraud for fraudulent parking practices in New York, call our Long Island securities fraud lawyers  at (516) 204-7611 to get professional legal advice.

The term “insider-trading’ has been coined by most investors to be associated with illegal conduct. But in actuality, insider trading includes both legal and illegal conducts. The term generally involves the purchase or sale of securities, puts, calls or other options based on material information. Hence, not all insider-trading activities spark an investigation by the U.S Securities and Exchange Commission (SEC) and other investigative officials.

What is illegal?

Insider trading is illegal when there is a breach of fiduciary duty or other form of trust and confidence while passing nonpublic information about the security of one company to another company, usually through deception.

For those who commence the securities transaction after obtaining the nonpublic information are guilty of “tipping” which is also illegal under the SEC definition of illegal insider trading.

The SEC has purposely kept their definition of insider-trading vague, so they can maneuver investigations on suspected individuals more easily. For example, for a “controlling person” who is the supervisor of the actual tipper may be investigated for conspiracy by the SEC after recklessly disregarding the fact that violator was likely to engage in insider trading.

Depending on the nature of the crime, the SEC can implement a myriad of actions that ranges from a simple “slap on the wrist” to a criminal prosecution referral. The SEC can seek a court order to disgorge the violator’s trading profits and issue hefty penalties that may be up to three times the misappropriated profits, or pass the case along to the Federal prosecutor’s office for further action.

If you are being investigated or arrested for securities fraud in New York or Long Island, then call our Long Island federal fraud lawyers at 516.204.7611 to get professional legal advice.

An advance fee scheme occurs when the alleged person/company receives money from another with the anticipation of receiving something of greater value, such as a loan, investment, or a job, and then gives little or nothing in return. An advance fee scheme is considered as wire and/or securities fraud since it often committed or aided through the use of interstate “wires”.

How are advance fee schemes investigated by the Federal Bureau of Investigations (FBI)?

Like many other financial schemes, a wire fraud is investigated after a victim or layperson has filed a report/complaint with the local police precinct or the FBI online. However, legal authorities may receive thousands of reported complaints everyday regarding scams and fraud schemes, but this doesn’t necessarily mean that they will launch an investigation on every complaint filed.

Typically, for the FBI to launch an investigation on an alleged wire fraud, there must be either interstate involvement or a loss exceeding a minimum financial threshold of $250,000.

Once the FBI determines that the alleged advance fee scheme meets either of these two criteria, it will then be passed to the FBI Financial Crimes Unit (FCU) for further investigation. Sometimes the FCU will deploy undercover investigators to pose as potential victims to trap the suspect. Once the investigators gather enough information, they will either arrest or attempt to conduct an interview with the suspect.

Often, by the time the defendant discovers that a FBI investigation is underway, the government has already gathered enough evidence against him/her. Many federal criminal defendants risk more than just a marred permanent record; they risk losing their professional licensure, property, job and ultimately their livelihood.

Our New York and Long Island white collar criminal defense team is well prepared to represent clients charged with wire and securities fraud on allegation of perpetrating an advance fee scheme.

If you are recently being investigated by the FBI or SEC, for wire and securities fraud in Long Island,  call our Long Island federal criminal lawyers at 516.204.7611 to get professional legal assistance.

Pumping and dumping involve manipulating the securities of companies by creating artificial buying pressures for them, so they look as if they are the latest “hot” stock when they are actually not.

When pumping securities, purported companies would create a high demand for their stocks to raise the price by misrepresenting certain information.

Often at times, a small and thinly traded company would feature a glowing press release about its financial health, or some new product/service when it is not exactly true. As a result, newsletters, messages in chat rooms, and bulletin board postings, all of which claim to offer unbiased recommendations may suddenly hype this small company as the latest “hot” stock, and cause many unwitting investors to voluminously purchase the hyped stocks.

With demand on the rise, the prices of the stocks would also rise. By the time the pumped securities reach their peak, the fraudsters behind the scheme would dump their stock by selling all of their shares and cause the price to drop significantly. Sometimes it is not even within the businesses’ knowledge that someone is fraudulently pumping their securities. But that doesn’t mean that legal authorities will not investigate the company and find some discrepancy. Small businesses need to be aware that by exaggerating their financial health with intent of misrepresenting the facts, they may be liable for securities and commodities fraud.

Federal law enforcement agencies such as the FBI and the US Securities and Exchange Commission (SEC) tend to conduct routine reviews or audits on small businesses. Discrepancies between the purported financial performance and the actual financial performance are usually found during this stage.

Prevention is usually the best way to go. At the beginning of a fraud investigation, it is best to seek an experienced defense counsel for a consultation on what to do next.

If you are recently being investigated by the FBI or SEC, for market manipulation in New York or long Island,  call our Long Island corporate fraud attorneys at 516.204.7611 to get professional legal assistance.