Securities Fraud And Money Laundering

INTERNET "INVESTMENT" SCAMS

        Internet investment scams continue to be on the increase. Federal prosecutors are actively investigating and prosecuting these cases. Online schemes operating out of Nigeria that have defrauded victims out of tens of millions of dollars have become so pervasive that the U.S. government has given the West African country until November 2002 to take steps to decrease such crimes or face sanctions. Financial fraud is now reportedly one of the three largest industries in Nigeria, where the anonymity of the Internet is being used to give crime syndicates a windfall. One oft-used form of fraud is known as "419," a reference to Article 419 of the Nigerian criminal code, and involves a scam artist sending an unsolicited e-mail, fax or letter proposing either an illegal or a legal business deal that requires the victim to pay an advance fee, transfer tax or performance bond or to allow credit to the sender of the message. Victims who pay the fees are then informed that complications have arisen and are asked to send more payment, according The 419 Coalition Web site, which explains the scam. The global scam, which has been going on since the early 1980s, had defrauded victims out of $5 billion as of 1996. While these types of frauds are relatively simplistic, they have been surprisingly successful.

SECURITIES FRAUD: 15 U.S.C. 78j(b), 78ff

        OTC "Pump and Dump" And Insider Trading Schemes

        The Over-the Counter Electronic Bulletin Board (the "OTC Bulletin Board") is an electronic price quotation service on which securities firms post prices at which they are willing to buy and sell shares of stocks. To conduct transactions on the OTC Bulletin Board, securities firms rely primarily upon computers, telephones, and the mail. Federal securities laws are intended to protect investors from fraud in connection with the purchase and sale of securities. Among the practices that the law prohibits is "market manipulation" (conduct intended to deceive customers by controlling or artificially affecting the market price that he investor pays.) This includes so-called "pump and dump" schemes, and "cybersmear" campaigns, which artificially inflate or deflate the market prices of the stock.

        Because the SEC and NASD rules require the filing of transaction reports and related documents, securities fraud cases always involve paper trails that allow prosecutors to trace the participants involved in the trading process. Defense of these cases therefore requires attacking the elements of knowledge and intent.

    Insider Trading

     You may be a broker who has been improperly charged - - by a customer, the authorities or the brokerage house you work for - - with improper or illegal activity. Perhaps your brokerage firm is trying to lay off its negligent supervision of a customer’s account on you. Or it claims that you are responsible for a customer’s loss which, in fact, was caused by your brokerage firm improperly recommending or pushing the sale of a certain security based on suspect research or other reason. Perhaps you have been charged with insider trading, “selling away”, unauthorized trading, churning, misrepresentations, price manipulation or other improprieties by state or federal law enforcement authorities. Or perhaps you were terminated from employment by your brokerage firm employer in violation of your statutory or contractual rights. Our firm attempts to resolve these charges when possible through non-criminal mediation. This is not always possible, and as the number of these claims and charges has skyrocketed with the growth of the internet, it has become critical to involve experienced counsel at the earliest possible stage.