There are several ways a person can commit securities fraud in Mississippi, but they all come down to one thing: illegally manipulating the market for personal gain. The federal government strongly enforces securities laws, and violators can face harsh penalties, including prison time.
Common types of securities fraud
The first is Ponzi and pyramid schemes, which involve convincing people to invest in a business or product by selling them the idea that they will make a lot of money quickly with little to no risks. Usually, the people who get involved early on do make some money because they are being paid with the funds from new investors.
Pump-and-dump schemes are another type of securities fraud in Mississippi that involves artificially inflating the price of a stock through false and misleading positive statements to create a buying frenzy so that the perpetrators can sell their shares at a higher price. These types of fraudsters typically target small, thinly traded companies with little analyst coverage.
There’s also insider trading, where someone uses non-public information about a company to trade its stock. For example, if an employee knows their company is going to announce positive financial news tomorrow, they might buy the stock today so they can sell it for a profit tomorrow. This is illegal because it’s not available information to the general public, and it gives the person an unfair advantage in the market.
What to do if you’re charged with securities fraud
If you’ve been accused of securities fraud, it’s important to understand the severity of the charges against you, and your options based on your specific circumstances. Some defenses that criminal defense attorneys use to have the case thrown out include:
• Demonstrating that the information you shared was not material or not important to investors
• Proving that you didn’t know the information was confidential
• Arguing entrapment
• Claiming absence of intent
Securities fraud does not only lead to fines and prison time; it could also damage your reputation, even if you are found not guilty. Hence, taking steps to clear your name could be essential to protecting your future.