The Florida Securities and Investor Protection Act (FSIPA), codified in Florida Statutes Chapter 517, is a comprehensive regulatory framework designed to safeguard investors and maintain the integrity of the securities market within the state. Central to this legislation is the prohibition of securities fraud.
Acts Prohibited Under Florida Statutes Chapter 517
Securities fraud encompasses any scheme or artifice to defraud investors or any omission of material facts that would mislead a reasonable investor. The FSIPA outlines a broad range of activities that are considered illegal or prohibited:
- Misrepresentation and omission. Making false statements or material omissions about a security or its issuer.
- Fraudulent sales practices. Employing deceptive or manipulative sales tactics to induce investors to purchase securities.
- Insider trading. Trading securities based on material non-public information.
- Market manipulation. Engaging in activities to artificially inflate or deflate the price of a security.
- Registration violations. Failing to register securities or salespersons as required by law.
- Unauthorized trading. Executing securities transactions without proper authorization.
- Theft or misappropriation. Stealing or misusing investor funds or securities.
- Churning. Excessive trading of a customer's account to generate commissions.
It is important to note that under the FSIPA, those found to have engaged in any act of securities fraud can face civil and criminal penalties. Such penalties can include substantial fines, imprisonment, and other sanctions.
Legal Definition of Securities
It is important to understand what securities are. Under Florida Statute § 517.021, securities include the following:
- Viatical settlement investments.
- Treasure stocks.
- Stocks.
- Receipts for securities.
- Evidence of indebtedness.
- Debentures.
- Commodity warehouse receipts.
- Bonds.
- A note.
- A certificate of interest or participation.
- A certificate of interest in a profit-sharing agreement or the right to participate therein.
- A certificate of deposit.
- A certificate of a deposit for security.
- An option contract that entitles the holder to sell or purchase a set amount of an underlying security at a fixed price within a specific time frame.
Penalties for Security Fraud Convictions
Any violations of laws in Chapter 517 are considered third-degree felonies. In Florida, third-degree felonies are punishable by imprisonment for up to five years.
If a person violates Florida Statute §517.301, which involves concealment of facts and making fraudulent transactions, and the value of the securities or goods involved exceeds $50,000 from five or more people, you can face first-degree felony charges. A first-degree felony is punishable by imprisonment for up to 30 years.
Rather than paying the fine associated with a felony, a person convicted or who plead guilty or no contest to a securities fraud offense can be sentenced to pay a fine of no more than three times the gross value gained or the gross loss caused by the criminal act. They can also be required to pay court costs and the cost incurred by the prosecution and investigation.
Statute of Limitations for Violating Securities Fraud Laws
In general, felonies outside of first-degree, second-degree, life, and capital felonies can be prosecuted within three years of the time the offense was committed. However, violations of Chapter 517 have a different statute of limitations imposed. A felony violation of Chapter 517 can be initiated within five years of the violation being committed (see Florida Statute §517.302 and 775.15(8)). It is important to note that this statute of limitations applies to criminal prosecutions, not civil actions.
Reach Out to Our Team
At Law Office of Jody L. Fisher, our team has decades of experience in helping clients plan their defense. Should you or a loved one face securities fraud charges, we can offer you an aggressive defense. Our attorney is an experienced litigator, which allows us to better strategize your defense and prepare for court.
Schedule a case consultation today by calling (352) 503-4111.