Municipal Securities / Pension Plan Fraud Criminal Defense Lawyer

Securities fraud and pension fraud can result in serious civil and criminal penalties. If you or someone you know has been charged with securities or pension fraud, contacting a Cofer Luster criminal defense attorney as soon as possible can make a difference in the outcome of your case. Contact us today at 682-777-3336 or through our online form.

Municipal Securities Fraud

Municipal securities include the following:

  • Bonds issued by states, cities, counties, or other governmental entities to raise money for projects that are for the betterment of the public.
  • Municipal fund securities are interest-paying securities that a state or municipal government issues to fund operating expenses or tax-exempt entities.

There are certain rules that municipal securities brokers are required to follow, including:

  • The broker must deal fairly and not engage in acts that can be considered deceptive or dishonest.
  • A broker can only recommend a municipal security if they believe it is suitable for the customer.
  • Before the trade, brokers must disclose all material facts about municipal security transactions.
  • The securities must be traded at a fair and reasonable price.
  • Brokers must have a supervisory system to ensure that all applicable municipal security rules and regulations are complied with.

Failing to abide by all the rules and regulations concerning municipal securities may constitute securities fraud. Securities fraud for municipal securities can also result from misrepresentation, insider trading, and churning. These fraudulent acts can result in fines, incarceration, probation, and restitution.


Knowingly misrepresenting the value of municipal security is considered securities fraud because investors have a right to accurate information to make informed decisions. For example, if someone publicly boasts about a municipal security and how it is going to be worth a lot more than it will truly be worth, it can be considered misrepresentation.

Insider Trading

Someone who uses information not made public to trade a municipal stock is engaging in municipal securities fraud. An insider is someone who has access to nonpublic, confidential information. Using that nonpublic information to trade securities gives the individual or entity trading the security an unfair advantage over investors who do not have the nonpublic information, which is what federal laws are trying to stop.

Penalties For Municipal Securities Fraud

Someone convicted of securities fraud may result in significant criminal and civil penalties, such as:

  • Fines: Depending on the type of securities fraud that occurs, someone can face up to $5 million in fines.
  • Incarceration: A conviction of securities fraud can result in up to five years in federal prison.
  • Restitution: Someone convicted of securities fraud may be required to pay restitution to the parties that were monetarily injured by the defendant’s actions.

Pension Plans Fraud

Pension fraud occurs when someone uses deceit or misrepresentation to withhold pension benefits or steal someone’s pension benefits. The Employee Retirement Income Security Act (ERISA) requires employers and fund managers to be held liable for damages that occur when an employee is defrauded of their pension funds.

What Is A Pension?

A pension is a retirement plan for certain individuals. The pension makes distributions from the retired workers’ investment funds. When a pension fund is set up, employees will enter into an agreement with their employer detailing the benefits they will receive from the pension fund.

Categories Of Pension Fraud

There are several categories of pension fund fraud, and the following are common ways someone may commit pension plan fraud.

  • Distributions: The person distributing the pension payments failed to distribute the pension plan funds in accordance with the agreement.
  • Expenses: Most investment plans pay recordkeeping fees and other expenses to manage the pension plan. Failing to disclose the expenses or overcharging expenses can be considered pension plan fraud.
  • Eligibility: Distributing funds to individuals who did not qualify for the pension plan is considered pension plan fraud and harms individuals who are eligible for the pension plan.
  • Contributions: Diverting contributions made to the pension plan fund to personal accounts or accounts other than the ones the contributions were meant for constitutes pension fraud.
Examples Of Pension Fraud

A recent pension fund fraud case example involved a multi-agency investigation that resulted in a criminal conviction. A former associate and office manager were convicted of stealing over $120,000 in employee deferrals meant to be deposited into the employee 401(k) pension fund. The associate and office manager also diverted over $500,000 of funds from bank accounts that belonged to their employer. The individual was sentenced to 37 months in prison and was ordered to pay restitution to people financially injured by the defendant’s actions.

Penalties For Pension Fraud

Under ERISA, an individual can face civil and criminal penalties for committing pension plan fraud. The penalties include:

  • Civil penalties: The convicted defendant may be required to pay restitution to the individuals defrauded and interest accrued on the benefits.
  • Criminal penalties: The defendant can be sentenced to up to ten years in prison and may face additional criminal fines.


Contact An Experienced Attorney For Help Today

If you or someone you know has been accused of committing securities or pension fund fraud, contact an experienced Cofer Luster pension fraud attorney to provide you with a vigorous defense. You can schedule a confidential consultation by contacting us online or calling us at 682-777-3336.


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