Today, both federal and state courts can hear Securities fraud cases. If one Wall Street veteran has his way, however, only federal courts will be able to hear securities fraud cases.
Maurice “Hank” Greenberg, former chairman of mega-insurer AIG, wants Congress to trim the provisions of a 1921 law that allows state civil courts to tackle investment related crimes. Greenberg agreed to pay a $9 million settlement to the State of New York last year to close a long-running securities case against him. The agreement may have settled the case against him, but Greenberg wants to change the rule that snared him.
Greenberg helped author and supports a bill to curb the states’ powers to prosecute securities crimes under the Martin Act. The bill, introduced by former AIG employee and current New Jersey representative Tom MacArthur, would do just that. That has some states’ Attorneys General crying foul.
While supporters of the bill say that it doesn’t limit the states’ rights to pursue criminal securities fraud charges, opponents disagree. State officials say that the Martin Act is an important tool in the fight against low-level securities scams.
Former New York Attorney General Eliot Spitzer used the law to tackle Greenberg in 2005. At the time AIG inflated its apparent reserves to appease critics. Additionally, the company buried losses from one division by hiding them in an off-shore entity. Both actions had the effect of misstating the company’s earnings. In 2005, AIG ousted Greenberg as its chairman. In 2006, the company restated its earnings and paid more than $1.6B in fines. It also ended the questionable practice of off-shoring losses, which it had done for more than two decades.
It’s unclear whether the Congress will adopt legislation to weaken securities fraud enforcement. It’s clear that the bill’s backers believe now is the right time to make that move.
California securities fraud lawyer
Securities fraud can be a civil or criminal matter, and today, states can pursue charges in either court system. When you’re facing investment related charges, hire an experienced securities fraud lawyer like Robert Helfend. Mr. Helfend has more than 30 years of experience in courtroom criminal defense. He takes cases in Ventura County and throughout Southern California.
His first move will be to get the charges against you reduced or dropped. When that’s not a possibility, he will fight aggressively on your behalf in court. Don’t settle for an attorney who won’t fight for you.
Contact Robert Helfend or call toll-free at (800) 834-6434, (805) 273-5611, (310) 456-3317 or (818) 591-2809 for an immediate consultation on your Ventura County securities fraud case.
Photo Credit: OmiB91, via Flickr.com