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Mutual Fund Fraud Defense

Defense for Mutual Fund Fraud Complaints

  • The defense attorneys at Oberheiden, P.C. routinely advise clients on mutual fund fraud allegations throughout all stages of the investigation and litigation process.
  • Our attorneys have an impeccable track record of success with high profile mutual fraud cases and have the resources and competence to stay one step ahead of recent aggressive enforcement tactics by federal agencies.
  • Get an experienced defense attorney from Oberheiden, P.C. on your side today to prepare a tactical defense strategy that gives your company the best chance of success.

Experienced Defense Team

John W. Sellers
Attorney John W. Sellers
Mutual Fund Fraud Team Lead
Former DOJ Trial Attorney
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If you have been charged or are being investigated for mutual fund fraud, do not wait to get in touch with an experienced defense attorney today.

The SEC has sharpened its enforcement tools targeting and investigating mutual funds especially after the Spitzer mutual fund scandal of 2003. This could result in unfair accusations leading to significant jail time and criminal penalties.

An allegation of fraud connected to a mutual fund could be devasting to you and affect your fund’s operations, profit, and reputation. Now is the time to take immediate action in your defense.

The defense attorneys at Oberheiden, P.C., can develop an individualized defense strategy to help you succeed at every stage of the investigation or litigation process.

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We are a nationally acclaimed team of defense lawyers specialized in defending its clients’ rights, assets, and reputation against unsubstantiated and unfair investigations. Our attorneys include former FBI agents, former U.S. attorneys, and former prosecutors. This blend gives us the special insight into regulatory bodies coupled with the passion and zeal to fight for you at every stage.

Call today or contact Oberheiden, P.C. online to put us on your side to fight for your liberty and reputation. It is worth it to you and to us.

What is a Mutual Fund and What are the Types of Mutual Funds?

A mutual fund is an investment fund that pools money collected from investors in order to invest in securities. It is an investment vehicle consisting of a portfolio of stocks, bonds and other securities. A mutual fund is operated by money managers who attempt to produce gains for the investors of the fund. The fund’s portfolio is structured in a manner to match the investment objectives and generate gains.

A mutual fund is classified according to the securities in the portfolios and the returns sought. Examples of the types of mutual funds include the following:

  • Equity Funds (invests in stocks)
  • Bond Funds (invests in debt securities)
  • Hybrid Funds (invests in both bonds and stocks)
  • Income Funds (provide a steady flow of income)
  • Fixed-Income Funds (investments with a fixed rate of return)
  • Money Market Funds (risk-free short-term investments)
  • International Funds (invests in assets outside of the investor’s home country)

The following sections will outline the federal and state regulation of mutual funds, provide examples of the types of mutual fund frauds, and offer some guidelines and tips regarding investigations for alleged mutual fund frauds.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney


Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Regulation of Mutual Funds at the Federal Level

Mutual funds are regulated at the federal level by several legislations:

  • The Securities Act of 1933: Mandates that investors are given specific information regarding securities that are offered for sale (Truth in Securities Act)
  • The Securities Exchange Act of 1934: Gives the SEC the authority to regulate the mutual fund industry
  • The Investment Act of 1940: Regulates the structure and operation of mutual fund companies and their investment objectives.
  • The Investment Company Act of 1940: Requires mutual fund to register as investment companies.

In addition to the regulatory authority of the SEC, mutual funds are also regulated by the Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission. A notable requirement of mutual funds at the federal level is the filing of reports and prospectuses with the SEC.

Regulation of Mutual Funds at the State Level

At the state level, a mutual fund is required to file annual notices when they sell shares in that particular state. A mutual fund must also pay an annual fee to the state and sometimes make annual reports.

Despite federal government authority and pre-emption issues at the federal level, states still maintain the authority to investigate and prosecute mutual fund frauds.

How To Select an SEC Defense Lawyer if You Have Been Charged with Mutual Fund Fraud

What is Mutual Fund Fraud and What are Examples of Mutual Fund Fraud?

A mutual fund is a sophisticated vehicle for investment and can be very profitable. However, fraud of mutual markets can occur if the broker-dealer is not legitimate. There are several types of mutual fund fraud including (but not limited to) the following:

  • Churning: This occurs when a broker excessively buys or sell securities in a customer’s account to generate commission. Churning benefits the broker only and not the investor. It can violate several federal securities rules, including SEC Rule 15c1-7 (which prohibits the manipulative, deceptive, or other fraudulent device or contrivance by an act of any broker, dealer or municipal securities dealer).
  • Break point fraud: This occurs when the broker recommends that the client invest in many smaller funds in different companies so that the broker makes a larger commission.
  • Fraud in the Prospectus: This occurs when the details in the required prospectus for a mutual fund purchase such as commission or costs are misstated.
  • Late Trading Fraud: This kind of trading occurs after the market closes (meaning the fund’s net asset value was already determined) but with the same price from when the market was still open.
  • Front Running Fraud: This occurs when the broker engages in a trade because he or she has non-public, inside information that will influence the asset’s price and result in a gain to the broker.

How Mutual Fund Fraud Investigations Work

A mutual fund investigation begins when an attorney general – federal or state – issues a complaint against the mutual fund company charging it with fraud in connection with its funds. When a complaint is first issued, usually at the state level, the SEC will sometimes get involved and launch its own investigation. Parallel investigations could be opened along with cooperation at the federal and state levels.

How to Respond If You’ve Been Charged/Arrested in Connection with Mutual Fund Fraud

An investigation or charge of mutual fund fraud can lead to unfair settlements or costly trials. We are trained to prevent both. At Oberheiden, P.C., our defense attorneys are skilled at handling complex fraud allegations involving mutual funds.

Do not wait for a complaint to be filed or for an investigation into your company to proceed without taking action. Do not divulge any information to a federal agent without first discussing with your attorney. Know your rights. Get in touch immediately with a law firm that is dedicated to the protecting your rights and defending you from unfair and targeted investigations.

Call us today or contact our office for a free consultation and protect your company.

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