The offense of securities fraud refers to both criminal and civil offenses; the term is used to describe unlawful activities surrounding investor opportunities and the trade and sales of stocks and bonds and other securities. Because the offense is a form of fraud, the perpetrator uses deceptive behavior to influence others to take specific actions concerning securities, often resulting in financial losses.
If a person engages in accounting fraud, insider trading, or investment fraud, such as a pyramid scheme or Ponzi scheme, in Virginia, they can be charged with securities fraud in violation of Virginia law, federal law, or both.
Overview of Virginia Securities Fraud Laws
When it's practical, it's helpful to review the relevant statutes in their entirety when researching a legal issue (especially when it involves criminal law). However, it's also useful and efficient to read a condensed version of the law written in easy-to-read language. See the chart below for a synopsis of Virginia's securities fraud laws.
- Va. Code Ann. Section 13.1-502 (unlawful offers/sales)
- Va. Code Ann. Section 13.1-503 (unlawful advice)
- Va. Code Ann. Section 13.1-504 (registration)
Elements of the Crime
Unlawful Offers and Sales
It is prohibited for any individual, relating to the offer or sale of any security (directly or indirectly) to engage in the following:
- Employ any device or scheme to defraud;
- Obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstance under which they were made, not misleading; or
- Engage in any transaction, practice or course of business which operates or would operate as a fraud or deceit upon the purchaser.
The following activities are prohibited for an individual advising another person regarding the value of securities or their purchase or sale:
- Using any device or scheme to defraud another person;
- Engaging in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon another person; or
- Engaging in dishonest or unethical practices as defined by the State Corporation Commission
Registration is required to transact business in Virginia for the following individuals:
- For any individual acting as a broker-dealer or agent except in transactions exempted by statute.
- An investment advisor or investment advisor representative.
- A federal covered advisor unless they have filed documents and paid fees as required by the State Corporation Commission.
The actual penalties will depend on the specific circumstances of the case, but possible penalties include:
- Restitution to the victim
- Civil penalties
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.
Virginia Securities Fraud Laws: Related Resources
Accused of Securities Fraud? Discuss it with a Virginia Attorney
If you've been accused of securities fraud in Virginia, then you should get a handle on your case by getting expert legal help. Discuss this serious matter with an experienced white collar crime attorney who can confidentially assess your case, evaluate the evidence, and provide you with your strongest legal options.