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Securities fraud may be charged as a state or federal crime depending on where the securities fraud occurred, how it occurred, and what type of securities were involved.


A.R.S. § 44-1991 defines securities fraud as a person in Arizona who, in connection with the sale or purchase of securities, directly or indirectly uses any device, scheme or artifice to defraud, makes any untrue statement of material fact or omits any statement of material fact needed to make the statements not misleading under the circumstances, or engages in any transaction, practice or course of business which operates or would operate as a fraud or deceit.   The definition of “securities” includes a detailed list of private and government securities exempted under A.R.S.  § 44-1843 and 44-1843.01 and a detailed list of transactions exempted under A.R.S. § § 44-1844, 44-1845, and 44-1850.  Under A.R.S. § 44-1995, securities fraud is a Class 4 felony punishable by 1 to 3.75 years in prison for a first time felony offense.

“You’re not the new Bernie Madoff just because you’ve been charged with securities fraud.”  Lisa Witt

15 U.S.C. § 78j defines federal securities fraud as a person who directly or indirectly uses any means of interstate commerce, the mails, or any national securities exchange in violation of the Securities and Exchange Commission’s rules and regulations concerning short sales, stop-loss orders or transactions involving the lending or borrowing of securities.  Securities fraud also occurs when a person uses any manipulative or deceptive devise or contrivance in violation of the Commission’s rules and regulations concerning the sale or purchase of either nationally registered securities or unregistered securities.  It is also federal securities fraud when a person effects, accepts, or facilitates a transaction involving the loan or borrowing of securities in contravention of SEC rules and regulations.  According to 15 U.S.C. § 78ff, any person who willfully violates any provision of § 78 or any rule or regulation there under by conduct or statements must be fined no more than $5,000,000.00 or imprisoned not more than 20 years or both for a defendant who is a natural person or a fine not exceeding $25,000,000.00 for a defendant who is a corporation or partnership.  If he or she proves that he or she had no knowledge of the relevant rule or regulation, he or she will not be imprisoned.  Civil penalties may also be imposed for failure to file certain types of information, documents or reports, and for violations by issuers, officers, directors, stockholders, employees or agents of issuers.



Defending a charge of securities fraud is extremely complex factually and legally regardless of whether you were charged by the State or the federal government.  Lisa is a thorough, detail-oriented defense attorney who will thoroughly evaluate your case and determine if one or more of the following potential defense strategies apply:

“Securities fraud charges are winnable.”

  Lisa Witt

  • Conduct described is not securities fraud:  The act described in the indictment may not fit the statutory definition of securities fraud.


  • Lack of intent or scienter:  You may not have the intent or scienter required to prove securities fraud.


  • No knowledge defense to avoid imprisonment:  You may have no knowledge of the relevant rule or regulation under 15 U.S.C.A. 78ff so you can avoid imprisonment.   


  • Entrapment:  You may have been entrapped by state or federal law enforcement to commit security fraud.


  • State or Government witnesses are mistaken or lying about what happened.


  • Impossibility of State’s or government’s story:  The State’s or government’s story may be impossible based on the timeline or other evidence.


  • Missing or tainted evidence:  Sometimes the State’s or government’s evidence is missing or tainted. 


  • State or federal police misconduct:  There may be police misconduct in investigating the charge, collecting the evidence, interviewing the victim and witnesses, or obtaining your confession.


  • Preclusion of State’s or government’s evidence:  The  State or government may have violated your constitutional rights or otherwise acted illegally in obtaining evidence or your confession so the evidence must be precluded.


  • Insufficiency of State or government’s evidence:  The government may have insufficient evidence to prove securities fraud beyond a reasonable doubt.


  • Reduction in number of counts: Each count of your state or federal indictment should concern a separate criminal act or victim and not be parts of the same securities fraud.


  • State or federal prosecutorial misconduct:  There may be prosecutorial misconduct in disclosing the evidence, interviewing victims and witnesses, and in the general course of your case.


  • Possible other defenses:  Depending on the unique facts of your case, there may be other possible defenses.  Lisa enjoys logically thinking outside the box so she may come up with a novel defense that no other attorney has thought of before.


If you or a loved one is facing a charge of securities fraud, it’s very important to hire a thorough and passionate defense attorney who will fight for you as soon as possible.  Call LisaLaw, LLC or fill out the on-line form for a free case review.

Lisa Witt is a Mesa/Phoenix, Arizona securities fraud defense attorney serving clients facing charges in the East Valley, West Valley, Maricopa County, Scottsdale, Tempe, Chandler, Fountain Hills, Apache Junction, Gold Canyon, Queen Creek, Gilbert, Casa Grande, Surprise, Goodyear, Buckeye, Youngtown, Ahwatukee, Avondale, Tolleson.

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