1. What Conduct Is Behind the Securities Fraud Allegation?
A promised return or disputed transfer may prompt a fraud allegation. Identify what investors heard, who approved it, and what was known then.
Identify the Statements and Promises under Review
- Projected returns: Separate forecasts and assumptions from claims of guaranteed results.
- Use of proceeds: Compare the stated purpose with any restrictions in offering documents.
- Risk disclosures: Check what investors received before committing funds.
A person who repeated a forecast may have known less than the person who prepared it.
Compare Investment Claims with Actual Transactions
| Claim at Issue | Records to Compare |
|---|---|
| Funds would support a project | Bank transfers and business expenses |
| Returns followed a stated strategy | Trade confirmations and account activity |
| Investor money remained segregated | Account ownership and transfer instructions |
Funds would support a project
- Records to CompareBank transfers and business expenses
Returns followed a stated strategy
- Records to CompareTrade confirmations and account activity
Investor money remained segregated
- Records to CompareAccount ownership and transfer instructions
An unsuccessful investment does not, without more, establish a fraudulent scheme.
2. Which Records Can Test the Alleged Misrepresentation?
Presentations can change before signing. Compare dated investor copies with contracts and payments.
Review Offering Documents and Investor Messages
- Match signed agreements with the specific pitch deck or offering version sent.
- Retain emails, messages, meeting notes, and dated investor updates.
- Identify corrections or new disclosures and when investors received them.
A correction may matter, but its timing and audience need review. SJKP's securities and finance practice addresses broader disclosure obligations.
Trace Investor Funds and Account Activity
| Evidence | Question for Review |
|---|---|
| Subscription and deposit records | When and by whom were funds received? |
| Bank and brokerage statements | Where did money move and why? |
| Invoices and approval records | Who authorized the relevant payments? |
Subscription and deposit records
- Question for ReviewWhen and by whom were funds received?
Bank and brokerage statements
- Question for ReviewWhere did money move and why?
Invoices and approval records
- Question for ReviewWho authorized the relevant payments?
An email recipient may not have authorized the payment; look for approval records.
3. How Do Federal and New York Fraud Charges Differ?
Federal criminal charges, SEC civil claims, and New York Martin Act allegations have different elements.
Assess the Federal Allegation and Required Intent
| Federal Law | Question to Assess |
|---|---|
| 18 U.S.C. § 1348 (criminal) | Was a covered fraudulent scheme knowingly executed or attempted? |
| Exchange Act § 10(b), Rule 10b-5 | What deceptive conduct and scienter are alleged in the SEC action? |
18 U.S.C. § 1348 (criminal)
- Question to AssessWas a covered fraudulent scheme knowingly executed or attempted?
Exchange Act § 10(b), Rule 10b-5
- Question to AssessWhat deceptive conduct and scienter are alleged in the SEC action?
Section 1348 covers securities of specified registered or reporting issuers and certain commodities. Criminal charges require proof beyond a reasonable doubt; SEC civil claims use a different standard.
Examine the Specific Martin Act Provision
- GBL § 352-c(1): Examine the alleged deception or false statement; intentional fraud is not required for every prohibited act.
- GBL § 352-c(5): Check for a systematic ongoing scheme intended to defraud or obtain property from at least ten people, with property obtained from one or more.
- GBL § 352-c(6): Examine intentional deception or a material false statement made with intent to defraud, resulting in wrongful acquisition of property valued above $250.
The precise subsection matters; intent requirements differ. SJKP also addresses related allegations through its criminal securities and financial fraud practice.
4. What Should the Accused Check When Investigators Make Contact?
Investigators may request documents or testimony. Check the agency, deadline, and whether the request is compulsory.
Identify the Agency and Nature of the Request
| Contact | Initial Review |
|---|---|
| SEC staff | Voluntary inquiry, subpoena, or sworn testimony request |
| Federal prosecutors or agents | Criminal investigative contact and stated legal process |
| New York Attorney General | Martin Act inquiry and requested records or testimony |
SEC staff
- Initial ReviewVoluntary inquiry, subpoena, or sworn testimony request
Federal prosecutors or agents
- Initial ReviewCriminal investigative contact and stated legal process
New York Attorney General
- Initial ReviewMartin Act inquiry and requested records or testimony
SEC enforcement is civil; criminal charges are brought by prosecutors. A formal SEC investigation can use subpoenas to obtain testimony or documents.
Preserve Records and Evaluate Statement Risks
- Preserve accounts, devices, communications, and transaction records in their original form.
- Determine who is represented and whether company and individual interests conflict.
- Have an attorney assess response obligations, privilege, and testimony risks.
Civil and criminal inquiries may overlap. SJKP's SEC enforcement practice covers the separate regulatory process.
5. What Should an NYC Securities Fraud Case Review Include?
Bring the notice and a timeline of pitches, payments, and disclosures. Identify your role and response deadlines.
Organize the Investment Timeline and Evidence
- Place each investor statement beside the version and date of its source document.
- Match investments, transfers, trading, and reports to supporting records.
- Note disputed authorizations, missing files, and people with direct knowledge.
This sequence can reveal whether a disputed fact was known before or after the investment.
Define the Attorney's Review and Defense Objectives
- Identify the precise allegation, jurisdiction, and current procedural status.
- Review intent, materiality, personal involvement, and available evidence.
- Discuss response deadlines, potential conflicts, fees, and representation scope.
A useful case review identifies contested facts, missing evidence, and immediate procedural decisions.
6. Frequently Asked Questions
How much does a securities fraud defense attorney cost in NYC?
Fees depend on the record, procedural stage, and hearings. Ask about scope and billing.
Can securities fraud allegations involve transactions outside New York?
Yes. Federal jurisdiction and applicable state law depend on the conduct and statutory requirements, not just where an investor or business is located.
Does settling with investors end a criminal securities fraud investigation?
No. A private settlement does not bind prosecutors or prevent a government investigation. Its legal effect depends on the agreement and proceedings.
Will a company pay an employee's securities fraud defense costs?
Payment depends on company documents, indemnification terms, and law. Conflicts may remain.
7. Discuss Your Securities Fraud Matter with SJKP
SJKP's attorneys can evaluate the statements at issue, fund movements, individual involvement, and the applicable federal or state allegations. Provide the investigative notice, key communications, and transaction timeline to discuss the scope of a defense case review.
11 Dec, 2025
