Investment and Securities Fraud

Las Vegas Investment Fraud Attorney Unveils Nevada Crimes of Securities Fraud (NRS 90.570)

Investments and securities are regulated by both the state and the federal government, so fraud convictions carry very serious penalties. Along with criminal charges, victims of investment and securities fraud may also file civil lawsuits which can result in huge damages awards.

Cases can be complex and investigated by law enforcement agencies over a long period of time.

If you are arrested for investment and securities fraud in Nevada, you need experienced white collar crime defense lawyers on your side to defend you.

What is a security?

A security is a legal instrument such as a:

• Note;
• Stock;
• Bond;
• Interest in a company; or
• Interest in minerals or a mineral lease.

Nevada excludes insurance policies, annuity contracts, and pensions from the legal definition of a security.

What is the legal definition of securities fraud in Nevada?

Securities fraud is deliberately using deception (including false or incomplete statements of fact) to gain an unfair advantage in the securities markets in violation of federal and state securities laws, in any of the following transactions involving securities:

• Purchase;
• Sale; or
• Offer to purchase or sell.

Nevada law also requires certain securities to be registered for sale and for disclosures to be made in connection with an offer to sell securities.

Common activities that constitute securities fraud include:

• Creating brokerage accounts using false information;
• Investing in securities that are too risky, and downplaying the risk;
• Excessive trading in an account to generate commissions for a broker (“churning”); and
• “Selling away,” which is the practice of selling an investment to a customer who believes it is associated with a certain brokerage firm, when in fact it is not.

Sentencing for securities fraud in Nevada

State law provides for large penalties and long prison times for a person convicted of securities fraud in Las Vegas, Nevada. Securities fraud is a Category B felony. Category B felonies in Nevada require prison time of 1 to 20 years and fines up to $500,000.

In addition to fines and jail time, Nevada law also requires a person convicted of securities fraud to pay restitution to the victim and to reimburse the state for the costs of investigating the crime.

Investment and Securities Fraud as Federal Crimes

Investment and securities fraud is also a crime under federal law. The Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) investigate and prosecute violations of the federal securities laws.

The most common violations of federal securities laws are:

• Insider trading: A person uses non-public information to buy or sell stock before the rest of the public has the opportunity to make a purchase or sale decision using the same information;
• Selling unregistered securities: Registration of investments and securities provides certain safeguards to the public, and failing to register an investment before selling it (unless there is an exemption from registration) constitutes securities fraud; and
• Fraudulent reporting: After highly publicized financial frauds like Enron and Worldcom, corporate executives must make certain disclosures to the public. Failing to do so is investment fraud.

Sentences for federal securities law violations

Insider trading has one of the highest penalties in all of federal law- up to 20 years in a federal prison and up to $5 million in fines for an individual.

Other securities fraud crimes have penalties ranging from 5 to 20 years in a federal prison and fines from $5,000 to $5 million.

Securities Fraud Resources in Nevada

Nevada Attorney General – Fraud
555 E. Washington Avenue, Suite 3900
Las Vegas, NV 89101
Las Vegas Office – 702-486-3420

Nevada Secretary of State – Investor Alerts

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