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Investment Fraud

San Jose Attorneys Skilled in Securities Litigation

Financial investments are known as securities. In some instances, an individual or corporation manipulates the market with false information or misleading information, such that the values of securities are affected. For example, if there is false information, the stock price may be improperly inflated. Investment fraud can lead to criminal prosecution. However, a party who has suffered losses because of investment fraud also can sue for damages or pursue arbitration through FINRA. The San Jose investment fraud lawyers at SAC Attorneys have compiled years of experience handling these cases.

Investment Fraud

Sometimes losses occur not because of the market, but because an investment broker or manager is trying to bring in money for the broker or firm, rather than for an investor. Many investors retain brokers and other professionals who keep up with the financial market on a daily basis and who understand how stocks and trades work. Unfortunately, some brokers and professionals are not scrupulous. They may be dishonest in order to benefit themselves.

Brokers and investment advisers owe a fiduciary duty, which is a high standard of care. They are expected to act toward an investor with loyalty, good faith, and reasonable care. Investors can suffer substantial financial losses if a broker or investment adviser perpetrates fraud or other misconduct, and they may bring a civil action. Investment fraud happens if an investor is induced to buy or sell a security based on false information. Investors often rely on brokers and investment advisers to help them determine which investments to make and how to manage them.

To help an investor recover damages, an investment fraud attorney in San Jose will need to show that false or misleading information was provided to the investor. When an investor suspects that a broker or investment adviser engaged in illegal conduct, the investor can try to claim damages under federal or state law. The specific facts of the situation will determine whether it would be more strategic to use federal law or state law as the basis of a claim. In many cases, a sophisticated attorney can help a broker or firm raise a strong defense.

California Investment Fraud Law

Under California Corporations Code section 25401, it is illegal for anybody to defraud or make a false statement of fact or omission about securities. Simply engaging in a material misrepresentation or omitting a fact can result in liability. Section 25501 of the California Corporations Code generates civil liability for violations of section 25401. It is not necessary under state law for the plaintiff to show that there was reliance or scienter, or even that losses resulted. It is easier for a plaintiff to recover damages under state law than under federal law, making it even more important to retain a seasoned San Jose investment fraud attorney if it becomes necessary to defend against such a claim.

Federal Investment Fraud Law

Investment fraud is governed by two primary laws at the federal level: the Securities Exchange Act of 1934 and the Securities Act of 1933. The former relates to fraud in the offering and selling of securities. Under Rule 10b-5 of the 1934 Act, it is illegal to make a false statement of material fact, omit material information, or engage in fraudulent or deceitful practices when buying or selling a security. The 1933 law relates to fraud that occurs when securities are registered and disclosures are made.

Elements that need to be established by a plaintiff include material omission or misrepresentation, scienter, the purchase or sale of a security, reliance, economic damages, and a causal relationship between the omission or misrepresentation and the damages.

Retain a Knowledgeable Investment Fraud Attorney

Investment fraud can result in substantial financial harm, and if you have a claim or need to defend against a claim, it is important to retain an experienced attorney. Claims and defenses in this area of law can be complicated, but SAC Attorneys can handle the complexities on your behalf. Call (408) 436-0789 or use our online form to set up an appointment with an investment fraud lawyer in San Jose.

Client Reviews
★★★★★
Mr. Cai Is a Diligent Attorney. My sister and I were defendants in a civil litigation case. We hired James Cai and his law firm, SAC Attorneys LLP. Mr. Cai is a diligent attorney and responded to our questions in a timely fashion. He and his staff were very helpful in keeping us informed of the proceedings of the case and in explaining each step. Mr. Cai is also very conscientious of fees and costs, and avoided unnecessary charges. The results of the Summary Adjudication sided with us. The Court Trial resulted in the “Final Statement of Decision” and “Judgment after Court Trial” overwhelmingly siding with us. Cynthia F.
★★★★★
I Am Truly Impressed. After spending a significant amount of time, money and efforts with my previous counsel at a larger law firm without getting meaningful results, I transferred my employment matter to SAC Attorneys LLP. The attorneys there were able to understand the complex situations of my case and put together an aggressive litigation strategy. We were able to file a compelling complaint within a week and forced the opposing party, which was represented by one of the largest law firms in California, to make a substantial settlement offer shortly thereafter. I am truly impressed by the no nonsense and results oriented approach by SAC Attorneys LLP attorneys. A job well done! X. Gao
★★★★★
They Took Time to Understand Our Technology. I am the founder of a bioinformatics start-up in the Silicon Valley and chose SAC Attorneys LLP as our corporate counsels. Their attorneys have great experience with high tech start-ups and were able to offer a highly competitive service plan while not sacrificing a bit of their quality of services. They took time to understand our technology and provided value added services by introducing investors and job candidates to us. We regard our attorneys at SAC Attorneys LLP not only as our legal advisors but also our venture partners. Dr. Pete S.