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Defending Against Allegations of Philadelphia Securities Fraud
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Defending Against Allegations of Philadelphia Securities Fraud
Being accused of securities fraud is no joke, and can lead to serious legal consequences if not properly defended. As a Philadelphia securities lawyer, I’ve seen many clients face these allegations and understand how stressful it can be. The good news is there are strategies we can use to protect your rights and beat the charges.
Let’s break down the basics of securities fraud so you understand what you’re up against. The main laws are Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5. These make it illegal to use manipulative or deceptive devices to defraud investors. Common allegations include:
- Insider trading – using non-public info to trade stocks
- Accounting fraud – cooking the books, earnings manipulation
- Misrepresentations – lying about company performance
The SEC loves to go after high profile cases that get attention. But their burden of proof is still “preponderance of evidence” – meaning it’s about 51% likely you did it. There are plenty of ways we can poke holes to create reasonable doubt.
Here are some of the most effective strategies I use to defend Philadelphia clients:
Fight the SEC’s Jurisdiction
Many fraud charges stem from trading on national exchanges like NASDAQ or NYSE. But the SEC has limited reach on purely intrastate activities. If the securities never crossed state lines, we can challenge whether they have authority in the first place. I’ve used this to successfully dismiss several cases.
No Proof of “Scienter”
A key element of securities fraud is scienter – intent to defraud. Reckless disregard for the truth also works. But simple negligence isn’t enough. I look closely for proof you actually knew statements were wrong or misleading when made. Sloppiness isn’t fraud.
Statute of Limitations Defense
The SEC must file charges within 5 years of the alleged violation. If they blow this deadline, we can move to dismiss based on the statute of limitations. I’ve won many cases because the SEC dragged its feet too long.
Lack of Reliance
Investors must show they actually relied on the misinformation. If we can prove they didn’t read or hear the false statements, their case crumbles. I dig deep into the evidence to show a lack of reliance.
No Damages Caused
Loss causation is another key element. The lies must directly cause investment losses. If the losses were instead caused by market forces, we can fight causation. I work with finance experts to show no direct damages.