Minnesota Securities Fraud Laws

Created by FindLaw's team of legal writers and editors | Last reviewed September 12, 2018

Incidents of securities fraud can constitute criminal "white collar" offenses, but they can also be treated as civil violations, opening up violators to lawsuits from victims. Securities fraud is broad-based and refers to unlawful behavior concerning the financial transactions of stocks, bonds, and other se curities. Both the federal government and states have prohibitions against deceptive practices that impact securities.

Unlike other states, Minnesota's securities regulatory program resides within the Minnesota Department of Commerce. The Minnesota securities division handles complaints relating to insider trading, pyramid or Ponzi schemes, or other forms of investment fraud.

A Synopsis of Minnesota Securities Fraud Laws

While it's preferable to work with an attorney to get a complete statutory analysis, a condensed guide to the statutes written in relatable terms and common language serves as a valuable introduction to the law. See the chart below for a helpful breakdown of Minnesota's security fraud laws.

Statutes

Minnesota Statutes:

Section 80A.69 (investment fraud advice)
Section 80A.70 (evidentiary burden)
Section 80A.72 (misleading filings)
Section 80A.73 (misrepresentations concerning registration or exemption)
Section 80A.75 (penalties)

Elements of the Crime

Unlawful Investment Advice:

Any person that advises others for compensation, either directly or indirectly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities or that, for compensation and as part of a regular business, issues or gives analyses or reports relating to securities, is prohibited from:

Employing a device, scheme, or artifice to defraud another person; or
Engaging in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

Misleading Filings:

It's unlawful for a person to make unlawful statements or cause unlawful statements to be made in a record for an action or proceeding, or which are filed under the statute in a venue other than a contested case hearing, where at the time the statements are made, they:

are false or misleading regarding any material fact; or
fail to state a material fact necessary to make the statements clear and not false or misleading.

Possible Penalties

The actual penalties will depend on the specific circumstances of the case, but possible penalties include:

Incarceration (up to 5 years)
Fines (up to $10,000)
Restitution to the victim
Civil penalties

Related Offenses

Minnesota Statutes:

Section 80A.50 (federal covered securities; small corporate offering registration)
Section 80A.60 (federal covered investment adviser notice filing requirement)

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.