Investment advisor and franchisor accused of securities fraud

On behalf of Brewer, Pritchard & Buckley, P.C. posted in securities fraud on Friday, September 21, 2018.

Texans who are working in the financial industry or create products related to it must be cognizant of the Securities and Exchange Commission and how it scrutinizes the business. Even when there is a belief that a product or device is completely legal, there could be missteps that violate regulations and lead to an allegation of violating federal securities laws. This is made worse when there are people who have lost money investing complaining about a person or a company’s tactics. When there is an arrest for securities fraud or other alleged legal violations, it is imperative to have a strong legal defense.

A man who owns an investment education business and was an investment advisor was charged with fraud by the SEC. According to the SEC, the man raised more than $6 million by telling investors that there would be significant returns. However, he is said to have failed to inform the investors regarding the negative forecasts regarding the business. He is also accused of having made false claims that the notes they purchased were secured. He then allegedly repaid earlier investors using new investor funds. The investors were attracted by false pitches. Some were students of his franchise to educate people on how to invest.

When trying to work in the securities industry, it is not uncommon for there to be allegations of legal violations. The SEC is constantly on the lookout for people who might commit violations for fraud, insider trading, pump and dump, and securities manipulation. Because these charges can not only result in jail time and significant fines but will also leave a person’s reputation in tatters with a difficult future ahead of them in trying to find work in their chosen profession, it is undeniable that legal help is a must. Perhaps it was a misunderstanding and the case could be dismissed or result in an acquittal. There might have been an honest mistake with no intent on violating the law. Having a defense is key.

In this case, the man paid more than $600,000 to return the funds as well as interest. He paid a civil penalty of $160,000. He can no longer sell, buy or offer securities, but did not admit or deny what the SEC claimed he did. Although this case was settled, others might not be. For people who are facing allegations of securities fraud, having a law firm that is skilled in providing defense for financial crimes is vital.