Pennsylvania Securities Fraud Laws

Created by FindLaw's team of legal writers and editors | Last reviewed March 02, 2018

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Securities fraud is generally defined as making untrue statements about the value of a company's stocks or about the company itself to convince people to make financial decisions based on that information. While the concept behind securities fraud is easy to understand, realizing that one is a victim of securities fraud can be difficult.

Securities are governed by both federal laws and state laws. In Pennsylvania, the Department of Banking and Securities provides resources relating to securities to both investors and industry professionals. Read on to learn more about how securities fraud is treated in the Keystone State.

Pennsylvania Securities Fraud Laws

The following table is a quick summary of Pennsylvania's securities fraud laws.

Statutes Title 70 § 1-401, Sales and Purchases; § 1-501, Civil Liabilities; § 1-511, Criminal Penalties.
What is Prohibited?

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

  1. Employ a scheme or device to defraud;
  2. Make an untrue statement of a material fact or omit a material fact; or
  3. Engage in a practice, act, or course of business that operates (or would operate) as a deceit or fraud upon another person.
Criminal Penalties Willful violation of the statute is a second degree felony punishable by fines of up to 1 million dollars and/or a prison term of up to 10 years. However, under certain circumstances, willful violation of this statute is a first degree felony punishable by fines of up to 5 million dollars and/or a prison term of up to 20 years. Whether it's a first degree or second degree felony, the violator may also be sentenced to make restitution.
Civil Penalties Any seller who sells or offers a security in violation of this statute will be held liable to the buyer, and any buyer who buys a security in violation of this statute will be held liable to the seller. The calculation of the amount the violator will be liable for depends on whether the violator was the seller or the buyer of the security.

Pennsylvania Securities Fraud Laws: Related Resources

You can visit FindLaw's section on Fraud and Financial Crimes for more information and articles on this topic. If you have questions about securities laws, you may want to contact a securities attorney in your area. If you have been charged with securities fraud, it's in your best interest to consult with a local criminal defense attorney.

Charged with Securities Fraud? Get Help From a Defense Attorney

Securities fraud is a serious charge that can result in both criminal and civil penalties, ranging from liability for the losses of others to prison time. If you have been charged with the crime or have specific questions about securities fraud, consider getting help from a Pennsylvania defense attorney near you.

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