Securities fraud can be a tricky concept to understand, and the fact that there are both civil securities fraud actions and criminal securities fraud actions makes matters even more complicated. A case in Collin County sheds some light on the difference between criminal securities fraud and civil securities fraud.

Texas Attorney General Ken Paxton is charged with civil securities fraud as well as criminal securities fraud. Recently, a federal court judge dismissed the civil securities law case for damages against Paxton due to an apparent lack of evidence. The criminal case in State court remained active, even though the lack of evidence could have become a major stumbling block in obtaining a conviction on any of the three criminal charges against Paxton. The SEC has since amended and refiled its case against Paxton with additional, previously undisclosed evidence that it hopes will help to prove that he failed to abide by disclosure laws. The additional evidence makes it likely that the criminal case will continue to proceed, because the criminal case had not been dismissed, even after the civil case was dismissed due to a lack of evidence.

One important difference between civil and criminal securities fraud cases is which party brings the action against the defendant. Civil securities fraud cases are heard in federal court, and they are brought by the United States Securities and Exchanges Commission. Criminal securities fraud is a state law cause of action, as is the related and often accompanying charge of failing to register with the Texas State Securities Board. Both of those criminal charges are felonies.

Not only do the two types of securities fraud cases take place in different courts, but they also involve different burdens of proof. In cases involving criminal securities fraud and related criminal charges like failure to register with the Texas State Securities Board, the prosecution must prove beyond a reasonable doubt that the crime did indeed occur before the defendant can be convicted. The burden in civil securities fraud cases is not quite as strict, requiring only that the SEC prove its case by a preponderance of the evidence.

Texas Criminal Defense Attorney Alex Tyra – Defending Texans against a Variety of Criminal Charges

The cases that have been brought against Ken Paxton provide an example of how civil and criminal securities fraud cases can look. Securities fraud is a complex issue, and each securities fraud case is unique. If you are charged with securities fraud, you need an attorney who understands the complexities of securities fraud law and can apply that knowledge to the unique facts of your case. Your Texas Criminal Defense Attorney has a working understanding of the law, and they will use that knowledge to build a strong case on your behalf. If you have been charged with securities fraud and you have questions, please call Texas Criminal Defense Attorney Alex Tyra, at (903) 753-7499. Alternatively, you may contact us online.