The term "misrepresentation" refers to a manifestation or assertion not in accordance with the truth. Both conduct and words that create a misleading impression or obscure true facts may be considered forms of misrepresentation.
Misrepresentation can be both a criminal wrong and a civil wrong. The defendant can face significant legal consequences if the misrepresentation becomes fraud, and misrepresentation can occur in a number of industries through the creation of contracts. When misrepresentation involves facts about commodities or securities or corporate financial statements, it may be classified as a form of investment fraud.
If you have been accused of securities fraud based on misrepresentations, contact Spodek Law Group P.C., PC today for legal assistance. Our team can represent your legal issues that arise from allegedly making misleading or false statements. Our New York misrepresentation lawyers have represented financial professionals, corporate executives, investment advisors and financial institutions accused of a variety of fraud offenses. Call us today for more information about our legal services.
Types of Misrepresentations
Although misrepresentations can occur in any context or industry, some of the most common cases of misrepresentation that result in investment fraud accusations include:
1. Making false statements about a company's financial situation. Board members and corporate executives may defraud the public and shareholders about the company's financial condition by misrepresenting the truth about losses and profits.
2. Misrepresenting potential gains and risks of an investment opportunity. Although pyramid schemes are where this type of misrepresentation most commonly occurs, it can happen anytime someone makes false promises about what an investment opportunity may mean for investors.
3. Preparing false account statements. Brokers and financial advisors may make misleading statements to obscure excessive trading to earn commissions. They may also misrepresent the value of their clients' accounts in cases of embezzlement or prepare false account statements to lure investors. Ponzi schemes are another form of misrepresentation fraud that rely on misleading or fake account statements with the goal of luring investors.
4. Making misleading or false statements about the value of securities. In pump-and-dump schemes, investors purchase a significant number of penny or microcap stocks and then heavily market them using misleading or false statements. In turn, the investors make a large profit and sell the stocks, leaving investors scrambling.
Fraudulent misrepresentation or intentional misrepresentation is common when large sums of money are involved, but severe penalties may result if an individual is convicted in an intentional fraudulent misrepresentation scam.
The attorneys at Raisser & Kenniff, PC know the laws surrounding misrepresentation like the backs of our hands. If you have been accused of a misrepresentation scheme, let us put our experience and skills to work for you.
Is Fraudulent Misrepresentation a Crime?
Keep in mind that innocent misrepresentation is not automatically a criminal offense. In order to determine whether you can be charged with a crime is to figure out whether the misrepresentation was knowing or intentional and whether it was part of a larger plan to commit fraud. Although fraudulent misrepresentation violates several laws as indicated below, there are several defenses you can raise, including lack of awareness that the statements you made were false and lack of intent to mislead.
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- 18 U.S. Code Section 1341, which prohibits artifices or schemes to defraud by using false promises, representations or pretenses.
- Federal and state laws prohibiting embezzlement and theft. New York Article 155 addresses embezzlement with penalties determined by the sum of money allegedly pilfered.
- 18 U.S. Code Section 1348, which prohibits the use of fraudulent or false misrepresentations and pretenses in connection with an artifice or scheme to defraud related to commodities or securities trading.
- Sarbanes Oxley, which makes CFOs and CEOs criminally liable for certifying financial statements and documents that contain misrepresentations.
Contact a New York Misrepresentation Lawyer for Legal Assistance
If you find yourself facing charges of misrepresentation, a fraud misrepresentation attorney can help you understand your options and the best way to respond to these charges. Do not try to handle the case yourself; the stakes are too high, and a lengthy prison sentence hangs in the balance. Instead, contact a misrepresentation lawyer at Spodek Law Group P.C., PC today for help in fighting the legal actions against you.