ISRAELS & NEUMAN, PLC – California Securities Arbitration and Investment Fraud Attorneys
Sections 25400 and 25401 of the California Corporate Securities Law of 1968
Israels & Neuman are securities arbitration and investment fraud attorneys that represent California residents who have been wronged by their stockbrokers and brokerage firms. Our attorneys have previously represented dozens of California investors who have been the victims of unsuitable investment recommendations, fraud, and theft, including the following:
- Represented victims of a fraudulent scheme run by a former financial advisor with LPL Financial;
- Represented investors who lost money in tenant-in-common (or TIC) investments from Lake Tahoe;
- Represent several victims of a Ponzi scheme run by a San Diego area financial advisor Burgess Hallums;
- Represented Los Angeles-area investor who lost money in non-traded real estate investment trusts (REITs) with now-defunct brokerage firm Morgan Peabody;
- Represent numerous investors seeking to recover damages from an Orange County brokerage firm who sold unsuitable penny stocks and private placements;
- Represented victims from the Sacramento area who lost money in a Utah Ponzi scheme run by Dee Randall; and
- Represented a plaintiff from Bakersfield in a shareholder dispute.
California residents are protected by the provisions of the California Corporate Securities Law of 1968. This Law provides for the regulation of the sale of securities to California residents and to California financial advisors and stockbrokers. Additionally, the California Securities Regulation Division, with offices in Sacramento, San Francisco, Los Angeles, and San Diego, was created to help enforce the provisions of the California Corporate Securities Law.
Section 25400 of the California Corporate Securities Law provides for liability if a financial advisor, stockbroker, or investment advisor misrepresents the risks of an investment to you. In particular, this statute provides that:
It is unlawful for any person, directly or indirectly, in this state:
(a) For the purpose of creating a false or misleading appearance of active trading in any security or a false or misleading appearance with respect to the market for any security, (1) to effect any transaction in a security which involves no change in the beneficial ownership thereof, or (2) to enter an order or orders for the purchase of any security with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price, for the sale of any such security, has been or will be entered by or for the same or different parties, or (3) to enter an order or orders for the sale of any security with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price, for the purchase of any such security, has been or will be entered by or for the same or different parties.
(b) To effect, alone or with one or more other persons, a series of transactions in any security creating actual or apparent active trading in such security or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.
(c) If such person is a broker-dealer or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security by the circulation or dissemination of information to the effect that the price of any such security will or is likely to rise or fall because of market operations of any one or more persons conducted for the purpose of raising or depressing the price of such security.
(d) If such person is a broker-dealer or other person selling or offering for sale or purchasing or offering to purchase the security, to make, for the purpose of inducing the purchase or sale of such security by others, any statement which was, at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or which omitted to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, and which he knew or had reasonable ground to believe was so false or misleading.
(e) For a consideration, received directly or indirectly from a broker-dealer or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security by the circulation or dissemination of information to the effect that the price of such security will or is likely to rise or fall because of the market operations of any one or more persons conducted for the purpose of raising or depressing the price of such security.
See Cal. Corp. Code § 25400. Section 25401 also provides that “It is unlawful for any person to offer or sell a security in this state, or to buy or offer to buy a security in this state, by means of any written or oral communication that includes an untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in the light of the circumstances under which the statements were made, not misleading.” The California Corporate Securities Law further provides civil remedies under Cal. Corp. Code §§ 25500-25510.
If your financial advisor or stockbroker makes misrepresentations to you when selling securities, he or she may be liable for your losses. In addition, the brokerage firm that your advisor works for may also be liable.
Israels & Neuman PLC is a securities arbitration and investment fraud law firm with offices in Denver, Colorado and the Seattle, Washington area. We represent investors in FINRA arbitration and securities arbitration proceedings in all 50 states, including representing investors throughout California, and in San Francisco, Los Angeles, San Diego, Sacramento, Oakland, Fresno, Anaheim, Riverside, Bakersfield, San Jose, Palm Springs, Berkeley, Long Beach, Santa Ana, Irvine, San Bernadino, and others. Our attorneys have represented over one thousand investors against many brokerage firms in the past.
Click to view: California Corporate Securities Law – Anti-Fraud Provisions
Click to view: California Corporate Securities Law – Civil Liability
If you are a resident of California and have lost money with your financial advisor or investment advisor, please CONTACT ISRAELS & NEUMAN at (720) 599-3505 or (206) 795-5798 for a free evaluation of your case.