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Texas Security Fraud: You Could Spend the Rest of Your Life Behind Bars

Posted on March 14, 2014 by Mintzer Law

Engaging in securities fraud in Texas is a crime that the state takes very seriously. A person convicted of committing the crime could be imprisoned in the state penitentiary for up to 10 years and have a criminal recorded with a felony conviction on it. Once released from prison, the individual could have difficulty obtaining a job, qualifying for housing or receiving financial aid for school.

Securities Fraud in Texas

Texas law makes it a crime engage in any of the following activities regarding securities without being a registered dealer or agent:

  • Engaging in a sale of securities
  • Offering securities for sale
  • Soliciting subscriptions or orders for the sale or disposal of securities

It is illegal in the state of Texas to sell, or offer for sale, securities issued after September 6, 1955 that have not been registered with the state or without first obtaining a special permit. Engaging in such prohibited conduct is a felony.

Fraudulent Representations

Securities dealers or officers of a corporation that is offering shares of their own stock for sale are prohibited from engaging in fraudulent conduct. This could include:

  • Knowingly making a false statement about the securities
  • Failing to disclose a material fact so that statements about the securities are misleading
  • Engaging in any act or business practice that is fraudulent or deceitful

A person making statements about securities might have a defense to a criminal charge of securities fraud by proving that the statements were made without intending to mislead. Another possible defense might be that the accused person did not know the statement was inaccurate.

Prosecutors must file criminal charges alleging securities fraud within the time set by the state law. The current statute of limitations is five years from the date of the commission of the acts prosecutors claim are illegal. A person who is not charged within the statute of limitations will avoid prosecution.

Penalties for Texas Securities Fraud

Securities fraud in Texas is a felony. The punishment a court may impose after a conviction depends upon the amount of money involved in the crime. The law allows prosecutors to ask for longer prison sentences and higher fines by combining different incidents into a single charge to increase the amount of the money involved.

According to the Texas Penal Code, sentences for securities fraud in Texas where the amount involved is less than $10,000 can be a fine up to $10,000 and a term of imprisonment from two to 10 years for a conviction of a felony of the third degree. If the amount involved is $100,000 or more, the charge could be a felony of the first degree and a prison sentence from five to 99 years with a $10,000 fine.

To avoid these criminal charges, it is important to speak with a criminal defense attorney who understands the complex legal system. Contact Rand Mintzer for free legal consultation by calling 713-862-8880.