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Colorado Securities Fraud Laws

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. 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, and since it can result in significant financial damage, it's classified as a serious crime.

While the U.S. Securities and Exchange Commission is responsible for enforcing federal securities laws, the Colorado Department of Regulatory Agencies (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 for securities fraud by failing to disclose debts to his clients and by providing certain financial advice without a license.

Colorado Securities Fraud Laws: The Basics

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.


Colorado Revised Statutes, Title 11. Article 51:

Prohibited Activities

It's prohibited for a person, in connection with the sale, purchase, or offer of any security, directly or indirectly to:

  • Employ a scheme or device to defraud;
  • Make a false statement of material fact or fail to state a material fact; or
  • Engage in a practice, act, or course of business that operates as a fraud.

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.

Charges and Penalties

Violation of Section 11-51-501 is a class 3 felony 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 as well.

Related Statute(s)

Colorado Revised Statutes, Title 11. Article 51, Part 5:

Colorado Revised Statutes, Title 18. Article 5, Part 3:

  • Section 18-5-301, et seq. (Fraudulent and Deceptive Sales and Business Practices)

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Colorado Securities Fraud Laws: Related Resources

For additional information and resources related to this topic, please click the links listed below.

Facing Securities Fraud Charges in Colorado? Contact a Lawyer

If you're facing securities fraud charges in Colorado, it's in your best interest to get in touch with a local white collar crimes lawyer to discuss your case and find out how Colorado securities fraud laws apply to your particular situation.

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