Marketing unregistered securities may lead to fraud allegations

The Securities Act of 1933 requires companies offering stocks and bonds to register them with the U.S. Securities and Exchange Commission. As noted by Investors.gov, the mandated registration process includes disclosing financial information. The law meets the need of enabling investors to make informed decisions.

Companies typically submit a registration statement with information about the securities they offer. An accompanying prospectus may describe a company’s products, services and properties. Investors may also review management bios and the company’s growth strategy before making a decision.

The 1933 Securities Act requires accurate statements

Materials sent to potential investors must provide truthful and accurate statements. A purported false or misleading statement found in a prospectus, for example, may compel an investor to contact the SEC after he or she purchased securities that did not yield the anticipated return.

When an investor files a complaint with the SEC, it may trigger an investigation that could lead to civil or criminal charges. If a federal official discovers a false statement, a company’s representatives may face allegations of securities fraud.

The SEC alleges Florida investment adviser engaged in fraud

Faced with one count of securities fraud, and as reported by WealthManagement.com, an unregistered investment adviser in Jacksonville pleaded guilty to making material statements containing fictitious information. He allegedly generated significant income by sending investors false dividend statements. According to the Department of Justice, he agreed to forfeit the properties he purchased from his profits as part of his plea deal.

An inquiry or investigation by the SEC could lead to charges carrying severe penalties. Federal officials may file civil and criminal actions against investment companies or individuals offering unregistered securities. The seriousness of these circumstances typically requires a strong and experienced legal defense. To learn more, review our page covering securities fraud charges.