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Securities Fraud Claims

From Jenice's interview for the Masters of the Courtroom series on
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To prove any fraud, a customer must show that the broker or someone else in the industry (a) intentionally or recklessly made a misrepresentation or omission of material fact that the customer justifiably relied upon, and then (b) suffered damages as a direct result of reliance on the misrepresentation or omission of material fact. Malecki Law’s New York securities fraud lawyers will tell you, more plainly, in the securities fraud context, this means the customer has lost money because he or she relied on information provided by a broker or securities industry member that the broker/member either knew or should have known was not true.

In making certain claims of fraud, an investor must show some reliance or action related to the misrepresentation. When a showing of reliance is required, it can be established by direct or indirect evidence. Direct evidence is akin to a statement in a prospectus claiming the existence of a lucrative contract that the issuer does not have. When the investor can show that their investment decision was based on that statement or omission, they have provided direct evidence of reliance. In many cases, Malecki Law’s New York securities fraud lawyers will not only be able to show the fraud, but even absent the fraud, the investments at issue are still unsuitable – in a “belt and suspenders” approach to the claims.

At times, a brokerage firm may misleading sell a proprietary product or sell a defective proprietary product. A proprietary product is a product created by the brokerage firm to sell to the public itself, as an issuer. Because there are potential conflicts of interest between the seller (brokerage firm) and buyer (investor) of this product, the area is ripe for fraud.

Even a Ponzi scheme can be considered a form of securities fraud, as investors weer lied to about the fictitious investment.

Investors can also use indirect evidence to prove reliance using a theory called fraud-on-the-market or claim defects in the securities products sold. Courts use the fraud-on-the-market theory when a misrepresentation artificially inflates the price of the stock. Because the misrepresentation affected the stock price, and the investor bought the stock based on the affected price, the investor is assumed to have indirectly relied on the misrepresentation that misled the market as a whole. In such case, the defendant may try to show that the misrepresentation was not important or did not affect stock prices, which securities fraud attorneys in New York at Malecki Law will challenge. The defendant may also attempt to show that the individual investor knew that the statement was false or would have bought the stock even if he or she had known of the falsity of the statement.

When a fraud by omission is claimed, the investor does not have to prove reliance. For example, if a prospectus omits to put prospective investors on notice that the issuer's patent on its primary product is being contested in court, it would be difficult for the investor to prove that he or she specifically relied on the missing information. The courts have decided that if the omitted information constitutes material facts that reasonably could be expected to influence an investor's purchase decision, positive proof of reliance is not required. Rather, reliance is presumed to exist. The defendant can overcome this presumption by showing that the investor's purchase decision would not have been affected even if the defendant had disclosed the omitted fact by, for example, proving that the plaintiff did not read the prospectus. Similarly, with defective products, our securities fraud law firm in New York, Malecki Law, can argue that the product should never been sold, was misleadingly marketed and sold, as well as was misrepresented in offering and other materials.

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Testimonials From Former Clients
I highly recommend Jenice and her team at Malecki Law. I had a challenging, and lengthly case. Jenice was professional, very knowledgeable, and a pleasure to work with. She managed to make the process far less stressful during a very difficult time. They care about their clients, and it definitely shows. Mario
Jenice is truly a miracle worker and one of the top securities lawyers. She handled a very difficult case for us, displaying her legal knowledge, intelligence, and savviness throughout the process. I cannot recommend her enough. The quality of work from her team rivals that of corporate law firms. She was always available, extremely professional, and made sure to know all the details of the case. We were very fortunate to have been referred to Jenice and highly recommend her for any securities related legal issues. Nathan A.
An excellent professional who represented us in trial regarding a bank fraud, an unexpected and difficult time. A professional that worked hard, persevering and who stood toe to toe against firms that had a team of excellent lawyers backing them up. Her unflinching determination really stands out, it makes you feel you have someone who really cares about trying to recover what you lost from the people that wronged you. Salomon Levi
It is difficult to thank you in words when gratitude comes from the heart, so I will try to link feelings with writing. It is essential for us to mention your excellence as a professional, your aptitude on legal fields, and your unavoidable persistence. All of these virtues that elevate the profession you exercise in such an admirable way, go hand in hand with your sense of ethics, your human warmth and the transparency in your actions. To sum up, thank you for being a listening ear and for having the right word while transmitting information about the legal process. Having you as our representative during such an adverse situation was a privilege and enough reason for our eternal gratitude. Angeles Aparain
To say that my securities litigation was complex would be a severe understatement. With multiple parties involved and spanning many years, trying to understand the issues was daunting to say the least. Jenice and her team broke down the transactions by segment and by party uncovering every hidden expense. In the end, I was more than happy and could not thank Jenice and her team enough. I would not hesitate to recommend Jenice to anyone. She is highly professional, incredibly knowledgeable, well connected to industry experts, has a tireless work ethic and is so pleasant and easy to communicate with. Five stars for sure! Andrew Loughrane