NCJ Number
126273
Date Published
1990
Length
42 pages
Annotation
This discussion of securities fraud emphasizes the hazy distinction between civil wrongs and criminal misconduct in this field of law. The absence of a clear boundary often gives rise to simultaneous civil and criminal proceedings and often prevents defense lawyers from predicting whether a given case will proceed only to civil liability hearings or whether it will also result in the commencement of a criminal investigation and possible indictment.
Abstract
Statutes giving rise to civil liability on the part of purchasers and sellers of securities involve both express and implied civil remedies as provided for in various articles of the Securities Act, Exchange Act, and Securities and Exchange Commission (SEC) Rules. "Blue Sky" laws are those enacted by States which contain specific provisions creating civil liability for fraud or misrepresentations, while other laws establish secondary liability in terms of aiding and abetting or controlling persons. Criminal responsibility in securities fraud is established under the anti-fraud provisions of the securities law, while laws against insider trading have been created by the SEC and the courts. The difference between civil and criminal securities fraud cases is discussed as are scenarios connected with parallel proceedings. Defense preparations for these cases are examined in terms of pre-indictment actions, pre-trial aspects, the trial itself, and sentencing. 105 notes