Securities Fraud Defense in Miami

These cases can be brought in Florida court, in federal court, or both, and a regulator may be running its own case at the same time. Dennis Gonzalez Jr. is a former Miami-Dade prosecutor who has been defending people since 2012. We defend people who are under investigation or charged. Our office answers 24 hours a day.

For the bigger picture, see White Collar Crimes and Economic & Financial Crimes.

Florida Securities Fraud (Chapter 517)

Florida's securities law is chapter 517 of the Florida Statutes. Its main anti-fraud section makes it unlawful, in connection with investment advice or the offer, sale, or purchase of any investment or security, directly or indirectly:

• to use any device, scheme, or artifice to defraud;
• to get money or property by an untrue statement of a material fact, or by leaving out a material fact needed to keep what was said from being misleading; or
• to engage in any transaction, practice, or course of business that operates as a fraud or deceit on a person.

The same section also covers, among other things:

• Paid promotion without disclosure: publishing or circulating material that describes a security in exchange for payment from the issuer, underwriter, or dealer, without fully disclosing that payment and how much it was.
• False claims of government approval: falsely claiming that a security or a person is guaranteed, sponsored, recommended, or approved by the state or the federal government.
• Lying to the regulator: knowingly and willfully falsifying or concealing a material fact, or making false statements or using false documents, in a matter within the Office of Financial Regulation's jurisdiction.
• Boiler rooms: managing, supervising, controlling, or owning a boiler room in Florida that sells or offers securities or investments in violation of the section.

The law defines "investment" broadly: a commitment of money or property mainly induced by a representation that an economic benefit may come from it, with some exceptions. The fraud section also applies to securities and transactions that are otherwise exempt from registration.

Penalties under Florida law

• Third-degree felony: any violation of chapter 517. A third-degree felony carries up to 5 years in prison and a $5,000 fine under Florida's general sentencing laws.
• First-degree felony: a violation of the anti-fraud section that obtains money or property of an aggregate value over $50,000 from five or more persons. A first-degree felony carries up to 30 years and a $10,000 fine.
• Alternative fine: instead of the usual fine, the court may impose a fine of up to the greater of three times the gross value gained or three times the gross loss caused, plus court costs and the costs of investigation and prosecution.

Those are the general maximums, not what every case gets.

Unregistered securities and unregistered sellers

Florida also requires registration:

• Securities: it is a violation to sell or offer to sell a security in Florida unless it is registered, exempt, sold in an exempt transaction, or a federal covered security.
• Dealers and associated persons: a dealer or associated person may not sell or offer securities in or from Florida, or to people in Florida, unless registered with the Office of Financial Regulation, unless an exemption applies.

Because any violation of chapter 517 is a third-degree felony, a registration problem can become a criminal charge even when no one claims a lie was told. Exemptions exist, and whether one applies is often the first legal question.

Federal Securities Fraud

Federal prosecutors in the Southern District of Florida bring securities cases under several laws:

• Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5. Section 10(b) makes it unlawful to use any manipulative or deceptive device in connection with the purchase or sale of a security, in violation of SEC rules. Rule 10b-5 makes it unlawful, in connection with buying or selling any security, to use a scheme to defraud, to make an untrue statement of a material fact or leave out a material fact needed to keep statements from being misleading, or to engage in any act or practice that operates as a fraud or deceit.
• Criminal penalties for willful violations. A person who willfully violates the Exchange Act or its rules (other than its foreign-bribery provisions, which have their own penalties) faces up to 20 years in prison and a fine of up to $5,000,000 (up to $25,000,000 for a company). The same law says no one may be imprisoned for violating a rule if the person proves he or she had no knowledge of that rule.
• Securities and commodities fraud, 18 U.S.C. § 1348. It is a federal crime to knowingly carry out, or try to carry out, a scheme to defraud, or to obtain money or property by false pretenses, in connection with certain securities (those of companies that have a class of securities registered with the SEC under the Exchange Act, or that must file reports with the SEC under that Act) or commodity futures and options. The maximum is 25 years and a fine.
• Attempt and conspiracy. Attempting or conspiring to commit § 1348 carries the same penalties as the offense itself.
• Wire and mail fraud charges often appear in the same indictment. See Economic & Financial Crimes.

Many federal securities cases turn on intent: whether the person meant to deceive, or honestly believed in the investment.

Common Miami Scenarios

We see investigations built around situations like these (described generally; every case is different):

• Ponzi-type allegations, where prosecutors claim early investors were paid with later investors' money rather than real returns.
• Private investment deals, such as real estate, small businesses, or loans, where investors say they were not told about the risks, fees, or how the money would be used.
• Promoters and salespeople who sold the investment for someone else and say they believed what they were told.
• Crypto and digital-asset offerings. Regulators may treat some digital assets, tokens, or crypto investment programs as securities. Whether a particular asset counts is a legal question that depends on the facts, and it can affect which laws apply.

Defense Issues We Look At

• Was there a misstatement at all, and was it material?
• What was actually disclosed in the offering papers, emails, and texts?
• Intent and good faith: did the person believe what they said?
• Role: the person who designed the deal is in a very different place than a salesperson or an employee.
• The numbers: in Florida, the first-degree charge turns on the total money or property obtained (over $50,000 from five or more people); in federal court, how the government adds up "loss" can drive the sentence.
• Registration and exemptions: whether the security or the seller needed to be registered at all.
• Statements to regulators: what was said or produced in any SEC or OFR matter.

Parallel SEC and State Regulatory Cases

The SEC, and in Florida the Office of Financial Regulation, can investigate and bring their own cases. What you say in testimony or hand over in a regulatory investigation can be used in a criminal case. Our practice is criminal defense; we make sure the criminal risk is protected from the start.

What to Do If You're Contacted

1. Don't talk to agents, investigators, or regulators without a lawyer.
2. Don't contact investors to explain, reassure, or settle things on your own.
3. Don't delete or change emails, texts, chats, files, or records.
4. Gather your offering documents and agreements for your lawyer, and nothing else.
5. Call us at (305) 209-0384.

If you expect to be charged, see Self-Surrender. If you are not a U.S. citizen, see Immigration Consequences.

Related Pages

• Insider Trading
• Organized Scheme to Defraud
• Money Laundering
• Unlicensed Money Transmitting and Crypto-for-Cash Charges
• Tax Fraud and Tax Evasion

Why Choose Dennis Gonzalez Law, P.A.

• Former Miami-Dade prosecutor.
• Defending people since 2012.
• Super Lawyers recognition and an Avvo Rating of 10.0.
• Bilingual office — se habla español.
• We answer 24 hours a day. Call (305) 209-0384.

You can read about some of our past cases on our Results page.

Frequently Asked Questions

My investors lost money. Does that mean I committed fraud?

No. Investments fail. Fraud requires more, such as a material misstatement or omission, or a scheme to defraud. What you said, what you disclosed, and what you believed all matter.

Can I be charged in both state and federal court?

Yes, it's possible. Florida and the federal government each have securities fraud laws.

What makes Florida securities fraud a first-degree felony?

Getting money or property of an aggregate value over $50,000 from five or more people through a violation of the anti-fraud section.

Is crypto a security?

It depends. Regulators may treat some digital assets as securities. Whether a particular token or program counts depends on the facts.

The SEC wants my testimony. Should I go?

Not without a lawyer. Testimony in a regulatory case can be used in a criminal one.

How fast can you help?

Our office answers 24 hours a day. Call (305) 209-0384.