If you work as a broker, your ability to get and keep customers is likely tied to your reputation. And if you are known as someone who consistently provides clients with quality service and solid returns on their investments, your opportunities for success should be unlimited. However, if a dissatisfied customer claims that your methods are in violation of securities regulations, not only does your personal brand suffer, but you could find yourself on the receiving end of criminal charges.
So, when you are advising clients on potential investments, it is very important to provide them with the information they need to make reasonable decisions. And you and your client are best served if the information provided is as complete as possible. Investors typically rely on their brokers to give them an accurate assessment of an investment's risks and chances of profitability.
It is this reliance on the broker's integrity that can ultimately lead an investor to claim he or she was defrauded because the broker deliberately provided misleading information. For example, if you as a broker tell an investor that a company has plenty of capital when it is actually struggling financially, you could be accused of securities fraud if you knew or should have known the truth.
But even if you make mistakes that lead to charges of security fraud, there are strategies you can employ to protect yourself. For instance, you may be able to demonstrate that the erroneous information you provided had no bearing on the value of the stocks purchased by the investor.
Securities fraud charges must be responded to in the strongest terms possible. To do otherwise could leave you more vulnerable to incarceration and large fines. Therefore, if you are facing such charges, you may want to have an experienced white collar crimes attorney act as your legal representative.