New York Securities Fraud Laws – Latest

In the New York financial ecosystem, securities fraud legal issues continue to be a crucial concern, with legislation constantly changing to reflect the current situation. As of 2025, New York securities fraud laws continue to develop significantly, shaping the interpretation and enforcement of relevant statutes that impact Wall Street and the broader financial institutions in New York.

Why You Should Know About the Martin Act

The Martin Act is a powerful legal tool enacted in 1921 to help fight against securities fraud crimes. In 2025, it continues to be the primary statute in New York used to investigate and prosecute individuals who have committed fraudulent activities related to commodities, securities, and other types of investment instruments. Under the Martin Act, the state attorney general has broad authority to pursue suspected New York security fraud crimes.

Critics of the Martin Act argue that this piece of legislation gives the attorney general too much power to go after entities—with permissions to call stakeholders to interview and issue subpoenas-–without having to require proof of intent to defraud or knowledge of existing illegal activity. This arguably leads to infringements on the rights and privacy of individuals and organizations.

Others claim that the Martin Act is a formidable tool to protect the public from falling victim to fraudulent practices.

Relevant Legal Precedents in Recent News

In 2024, a New York federal court dismissed large parts of the federal Securities and Exchange Commission’s claims of fraud against the entity SolarWinds regarding risk disclosures for cybersecurity. The court ruled that the case should be allowed to proceed on the basis of a certain statement that was made regarding cybersecurity practices seen on the company website. These findings underscore the significance of accurately disclosing information to the public.

The U.S. Supreme Court also recently ruled in SEC v. Jarkesy the right for defendants to have a jury trial if the SEC is seeking civil penalties for securities fraud crimes. This could potentially influence how the SEC may approach investigating and prosecuting instances of alleged securities fraud.

Understanding the Role of the SEC in Enforcement

The SEC has continued to actively investigate cases that involve the non-disclosure of certain financial arrangements. As an example, charges against Icahn Enterprises L.P. and Carl Icahn were brought forward as a result of the failure to adequately disclose pledges of company securities in collateral exchange for personal loans. These pursuits further highlight the importance of adequately disclosing contract terms and financial information to stakeholders and the public.

How This Impacts Corporations and Investors

Recent developments in the regulatory landscape regarding securities fraud show the significance of corporations maintaining transparency with the public and continuing to comply when it comes to financial disclosures. When reporting on company information, corporations should be sure to maintain accurate and complete reports. Ensuring compliance can help mitigate operational risks and avoid costly legal proceedings.

On the other hand, investors should thoroughly research a venture before making an investment, remaining vigilant and aware of the potential for dishonest or misleading practices in the markets.

New York Securities Fraud FAQs

Q: What Is Securities Fraud Under New York Law?

A: Under New York law, security fraud crimes involve practices that are deceptive regarding the sale, purchase, or offer of securities. Examples of these crimes include omitting important information during a sale, making false statements that influence behavior, and manipulating markets. Insider trading is an example of security fraud. Under the Martin Act, the attorney general is granted broad authority to investigate and pursue securities fraud activities.

Q: What Is the Martin Act?

A: The Martin Act is the primary statute in New York, which was signed into law in 1921, that authorizes the state to crack down on securities fraud offenses. Under the Martin Act, the attorney general has broad powers to carry out investigations and prosecutions regarding fraudulent securities practices. This legal authorization is potentially potent, as it allows the attorney general to take action without the need to prove an intent to defraud.

Q: What Are the Penalties for Securities Fraud in New York?

A: Potential penalties for securities fraud in New York are dependent on the defendant’s criminal history and the severity of the offense. While a misdemeanor violation can result in fines and up to a year in jail, more severe felony crimes can lead to a sentencing of years in prison. Furthermore, victims may choose to bring forward civil litigation against defendants to pursue restitution. In such cases, further penalties may be imposed.

Q: How Does New York Define Insider Trading?

A: New York defines insider trading as selling or buying securities using material information that is not available to the public. In the state of New York, such actions are illegal under both New York and federal laws, such as the Martin Act. Under the Martin Act, individuals are prohibited from trading based on significant information that has not been adequately disclosed to stockholders and other important stakeholders.

Q: Are There Recent Updates to New York Securities Fraud Laws?

A: As of January 2025, New York continues to crack down on fraudulent practices involving the offer, sale, or purchase of securities. When it comes to investigating and prosecuting acts of financial fraud, the Martin Act continues to be a critical legal tool. Ongoing efforts continue to ensure that investigation techniques are evolving as technologies do so that crimes involving complex financial instruments can be rooted out.

Ensure Your Rights and Interests Are Protected Against Securities Fraud Charges

As financial technologies continue to evolve and cumbersome regulatory frameworks persist, it is crucial to work with an experienced securities fraud defense attorney who can help you avoid being unnecessarily implicated in a crime or help you mount a defense if you are facing accusations.

A knowledgeable criminal defense attorney from Greco Neyland, PC, can help you tackle the challenges associated with New York securities fraud laws and understand how they may impact your case. Contact us today to learn more about how we can defend your rights and interests.