NRS 90.650: Investment/Securities Fraud in Nevada—Definition, Penalties, and More
When you think of securities fraud or investment fraud, you may think of movies like “Wall Street” or ‘The Wolf of Wall Street” that make moving around other people’s money look glamorous and exciting.
These crimes are anything but glamorous and can land the person charged with these crimes in prison for a very long time. For example, this Las Vegas man was sentenced to 4 years in prison for a $6 million investment scheme.
Nevada has several laws on the books that are considered securities or investment fraud. Since the financial crisis of 2008 many states including Nevada increased the oversight of stockbrokers, accountants, and traders of stock and securities.
During the 2008 financial crisis Nevada was hit particularly hard and many people lost everything including their homes. Since then Nevada has taken a stronger stance on keeping securities fraud from happening to innocent victims.
Being charged with security or investment fraud can be either a Federal crime or a state crime depending on the details of the case. In some cases, the Federal case will preempt the state laws and you may face the federal charges first.
Even though investment or securities fraud is a financial crime, it is a charge with severe penalties.
If you are facing any securities or investment fraud charges in Nevada or Federally, you need to hire an experienced attorney who has expertise in all laws including financial crimes.
Call The Defenders today for a case review.
Our experienced team of defense lawyers will help you understand what to expect from your case and the charges you are facing.
What Is Securities Or Investment Fraud In Nevada?
Securities fraud, also known as stock or investment fraud, typically involves providing false or misleading information to manipulate investors into buying or selling stocks. In Nevada, securities fraud encompasses six distinct criminal offenses, each addressing specific fraudulent activities within the realm of investments.
- NRS 90.570 – Fraudulent offer, sale, or purchase of securities
- NRS 90.575 – Violation of fiduciary duties by brokers, dealers, sales representatives, and investment bankers
- NRS 90.580 – Stock market manipulation
- NRS 90.590 – Illegal transactions by investment bankers
- NRS 90.605 – False representation or destruction of evidence in stock fraud investigations
- NRS 90.610 – Unlawful representation regarding licensing
What Are The Most Common Forms Of Securities Fraud?
Securities fraud can be complex, often involving multiple layers of deception. This is why it may take time to recognize when such fraud is occurring.
The most common securities fraud crimes include:
- A stock broker creating a fake account
- A public company employee or insider buying or selling that companies stock based on non-public disclosed information. This is usually referred to as insider trading.
- A broker that invests a clients funds into risky investments without the clients knowledge
- A broker that trades clients funds without a clients permission
- A broker that sells or buys securities to obtain an extra commission for themselves
- A broker putting all of clients funds into one investment instead of spreading it out to lesson the risk
These are the most common forms of securities or investment fraud. These cases can be federal or state depending on the circumstances of the case.
Penalties For Securities Or Investment Fraud in Nevada
Depending on the case, violating any securities fraud law in Nevada is a category B felony with a sentence of:
- Up to 20 years in prison and/or
- Up to $500,000 in fines
- Additionally, the defendant will be ordered to pay restitution and cost incurred by the Nevada’s Attorney General’s Office. The amount will be doubled if the victim was at least 60 years old or physically or mentally disabled.
Federal Securities Fraud
One of the most prosecuted federal crimes is securities fraud. This includes insider trading and many other crimes that fall under federal prosecution.
The Securities and Exchange Commision is the government agency that investigates suspected acts of securities fraud. If they find a suspected crime is being committed, The Department of Justice (DOJ) will take over the case and may bring federal criminal charges.
Federal securities fraud carries severe consequences, including up to 20 years in prison, hefty fines amounting to millions of dollars, and mandatory restitution to victims.
The Sarbanes-Oxley Act of 2002
This is a federal law that requires corporations to follow certain financial reporting and record keeping practices. The act’s purpose is to improve corporate responsibility and disclosure.
This act was invoked after several high-profile corporate fraud cases. It provides protections for investors from false financial reporting.
Violating The Sarbanes Oxley Act can lead to a prison sentence of up to 25 years in prison and or fines.
Certifying a false report carries up to 20 years in prison and up to a $5,000,000 in fines.
Federal Penalties for Securities Fraud
Federal penalties differ from state penalties and are determined by the specific crime for which the defendant is convicted. For instance, a conviction for insider trading can result in up to 20 years in prison and fines of up to $5 million.
Both fraudulent registration of securities and the sale of unregistered securities have penalties of up to 5 years in prison and/ or $10,000 in fines.
Common Defenses to Investment Fraud Charges
When charged with securities or investment fraud, your defense team may be able to prove that there was no crime because there was no intent.
Making a mistake or something done by accident is not a criminal offense. If your defense team can prove that this was a mistake or accident, then the charges may be able to be dismissed.
Evidence needs to be provided to prove that there was no intent. This evidence can include:
- Emails, text messages and any other written communication from the defendant
- Witnesses who heard or saw the defendant making the transaction at issue
- Video or audio recordings
- A paper trail that supports the defendant’s claims
Whether the charges are at the state or federal level, the burden of proof always rests with the prosecutors.
If it can be proven that there was no intent in the crime, charges should be dropped.
Facing Fraud Charges? Hire The Defenders
Since securities and investment fraud is one of the most prosecuted crimes, you need to know your rights.
Securities fraud are felonies involving lengthy prison sentences and consequences that can affect your future.
If you or a loved one is facing charges for securities or investment fraud you need to speak with a legal defense expert.
Hiring a lawyer is important because a personal defense attorney can exclusively give your case the attention it deserves, unlike a public defender who may have many, many cases.
A defense team you hire has resources to investigate your case properly, gathering evidence that may help you in the long run.
An experienced defense team may even be able to get the charges reduced or dismissed.
The Defenders may also be able to get the penalties reduced.
Our team of experts have many specialties including financial crimes like securities or investment fraud.
Our team will guide you through what to expect during your consultation or case review, ensuring clarity and confidence from the start. We’ll stand by your side every step of the way, providing support throughout the entire process.
We can negotiate a charge reduction or dismissal on your behalf.
Our team defends charges including DUI, domestic violence and financial crimes including securities and investment fraud.
Call The Defenders today for a consultation with one of our legal experts.
Frequently Asked Questions
What is securities fraud
Securities fraud is a financial crime that involves deceptive practices in the stock or investment markets. This can include insider trading, misrepresenting information to investors, embezzling funds, or manipulating stock prices for personal gain. Acts of securities fraud can be prosecuted at both the state and federal levels, and penalties can include severe prison sentences, large fines, and mandatory restitution to victims.
How can I prove I did not intend to commit securities fraud?
To prove lack of intent, you need evidence to demonstrate the transaction in question was a mistake or an accident. This evidence may include emails, text messages, witness testimony, or financial documentation showing no criminal purpose. A strong defense team can help gather this evidence and build a case to argue against allegations of intent.
What are the penalties for securities fraud in Nevada?
Securities fraud in Nevada is considered a category B felony, punishable by up to 20 years in prison and fines of up to $500,000. Additionally, offenders may be required to pay restitution, particularly if the victims are senior citizens or those with physical or mental disabilities. These penalties underscore the seriousness of securities fraud within the state.
Why is hiring a private defense attorney important for securities fraud cases?
A private defense attorney can provide your case with focused attention and the resources needed to build a strong defense. Unlike public defenders, who often manage multiple cases simultaneously, private attorneys can prioritize your situation. They can investigate the details of your case thoroughly, gather evidence, and negotiate with prosecutors to reduce or dismiss charges.
What role does the SEC play in securities fraud investigations?
The Securities and Exchange Commission (SEC) is responsible for investigating suspected securities fraud. If evidence supports the occurrence of criminal acts, the SEC may refer the case to the United States Department of Justice for prosecution. The SEC plays a crucial role in protecting investors by monitoring and enforcing financial market regulations.
