{"id":372015,"date":"2018-10-25T17:02:22","date_gmt":"2018-10-25T22:02:22","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/state\/colorado-law\/colorado-securities-fraud-laws.html"},"modified":"2018-10-26T12:48:41","modified_gmt":"2018-10-26T17:48:41","slug":"colorado-securities-fraud-laws","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/state\/colorado-law\/colorado-securities-fraud-laws.html","title":{"rendered":"Colorado Securities Fraud Laws"},"content":{"rendered":"\n
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Colorado Securities Fraud Laws<\/h1>\n
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Created by FindLaw’s team<\/a> of legal writers and editors<\/i><\/p>\n\n | Last reviewed\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Financial investments – such as stocks and bonds – all fall under the general umbrella of "securities." There are a variety of laws, both at the federal and state levels, governing securities<\/a>. These laws prohibit the making false or misleading statements about the value of a company’s stocks to convince people to make financial decisions, among other conduct. This type of behavior is known as securities fraud<\/a>, and since it can result in significant financial damage, it’s classified as a serious crime.<\/p>\r\n

While the U.S. Securities and Exchange Commission<\/a> is responsible for enforcing federal securities laws, the Colorado Department of Regulatory Agencies<\/a> (DORA) is responsible for protecting investors and maintaining confidence in the securities market in Colorado. In one case, DORA investigated an Englewood financial adviser who was later arrested<\/a> for securities fraud by failing to disclose debts to his clients and by providing certain financial advice without a license.<\/p>\r\n

Colorado Securities Fraud Laws: The Basics<\/h2>\r\n

Statutes usually consist of legal jargon that’s not always easy on the eyes, especially when it’s regarding a complicated subject like securities. For this reason, it’s often helpful to read a summary of the statute in plain English. In the following chart, you can find a summary of securities fraud laws in Colorado as well as links to relevant statutes.<\/p>\r\n\r\n
Statute(s)<\/b><\/td>\r\n

Colorado Revised Statutes, Title 11. Article 51:<\/p>\r\n

Prohibited Activities<\/b><\/td>\r\n

It’s prohibited for a person, in connection with the sale, purchase, or offer of any security, directly or indirectly to:<\/p>\r\n

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  • Employ a scheme or device to defraud;<\/li>\r\n
  • Make a false statement of material fact or fail to state a material fact; or<\/li>\r\n
  • Engage in a practice, act, or course of business that operates as a fraud.<\/li>\r\n<\/ul>\r\n

    Section 11-51-501 also prohibits a variety of other activities specific to investment advisers, broker-dealers, and financial institutions. For details, please see the statute.<\/p>\r\n<\/td>\r\n<\/tr>

Charges and Penalties<\/b><\/td>\r\n

Violation of Section 11-51-501 is a class 3 felony<\/a> punishable by 4 to 12 years in prison and\/or fines of $3,000 to $750,000. It’s also possible that the offender will be held civilly liable<\/a> as well.<\/p>\r\n<\/td>\r\n<\/tr>

Related Statute(s)<\/b><\/td>\r\n

Colorado Revised Statutes, Title 11. Article 51, Part 5:<\/p>\r\n