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Laws like the National Securities Markets Improvement Act of 1996 (NSMIA) and New Jersey’s Blue Sky law are federal and state-level regulations that protect investors from securities fraud. But when these protections fall short, who can sue for securities fraud in New Jersey?
Who Can Sue for Securities Fraud in New Jersey?
New Jersey grants certain individuals and agencies the right to sue for securities fraud if they are harmed by the fraud. Investors who can demonstrate losses that were the result of a business or individual’s misrepresentation or omission of information may file a claim.
Below are more detailed explanations of individuals and groups who have been victims of fraud and are eligible to sue for securities fraud in New Jersey.
- Individuals: Individual investors who were directly defrauded in their pursuit to purchase or sell securities.
- State agencies: The New Jersey Bureau of Securities (a unit of the New Jersey Division of Consumer Affairs’) is entitled to investigate and enforce securities fraud. The New Jersey Office of Securities Fraud and Financial Crimes Prosecutions is another government watchdog of securities fraud and has the power to investigate and prosecute securities fraud.
- Federal Agencies: The US Securities and Exchange Commission (SEC) and the Financial Industries Regulatory Authority (FINRA) can bring actions against groups, group members, or individuals engaged in fraudulent practices, and can refer criminal matters to criminal law enforcement authorities.
Consequences of criminal charges can bring serious securities fraud penalties. Civil charges can result in thousands of dollars in compensation for losses. Anyone involved in a case or facing charges of securities fraud should speak with a qualified and knowledgeable New Jersey securities fraud lawyer. A lawyer from Tim Anderson Law, LLC can explain your rights and provide legal advice on how to proceed with your case.
What Is Needed to File a Claim?
A claim against an individual or business in New Jersey for securities fraud should be backed by certain substantial evidence. Even if you do not have sufficient evidence, you may still want to file a claim and let the New Jersey Bureau of Securities investigate the claim. Never be embarrassed or feel ashamed if you are a victim of securities fraud or investment fraud.
A successful securities fraud claim should have the following components:
- An intentional misrepresentation or omission of information by the accused
- A connection to an actual purchase or sale of a security by the plaintiff
- The plaintiff’s reliance on the misinformation provided by the defendant regarding the investment
- A verifiable economic loss that is a direct result of the plaintiff’s reliance on the information or omission of information the defendant provided in terms of the investment in question
- Proof that the loss was a direct result of the intentional misrepresentation or omission
Who Protects New Jersey Residents Against Securities Fraud?
The New Jersey Bureau of Securities is the department charged with the regulation of the securities industry within the state. This includes protection for investors from investment fraud.
The Bureau provides investigative means and enforces actions against those who violate the New Jersey Uniform Security Law and its regulations. They also regulate securities sold and offered in New Jersey.
The Bureau oversees individuals and firms that sell securities or provide investment advice to residents of New Jersey. Through the New Jersey Investor Education initiative, the Bureau aims to educate New Jersey residents on how to become smart investors and promote financial literacy.
When problems arise, the Bureau of Securities recommends that individuals file a complaint against the business or individual that offers questionable investment advice or sells fraudulent securities.
The Bureau investigates all claims and works with law enforcement to determine if any statute within the New Jersey Uniform Security Law has been broken. They then bring an administrative action or file a case against the business or individual.
New Jersey residents are urged to ask questions about investments before they invest and look up the financial institution on the NJ Bureau of Securities website or call the Bureau. The New Jersey Division of Consumer Affairs also provides information on reputable investment companies and offers education on smart investing. You may also inquire if a company is registered with the SEC by using the EDGAR database to ensure safe investing.
