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South Carolina Criminal Defense Attorney | Over 25 Years Experience

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South Carolina Criminal Defense Attorney | Over 25 Years Experience

Call Today | Free Consultation

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Lying about your company’s finances can lead to fraud charges

On Behalf of | May 2, 2022 | White Collar Crimes |

You have a great idea for a new company or already run a company that has recently started to struggle financially. Outside investments can be a way to keep your company afloat as you restructure or to get the business off the ground.

However, as someone seeking investment from individuals, banks or investment groups, you need to be very careful about how you present your business. Misrepresenting its current status or prospects could eventually lead to allegations of investment fraud.

You need to provide prospective investors with accurate information

You cannot intentionally lie to the people or businesses considering investing in your company. You have to provide them with verifiable information about your company or keep things vague enough that you don’t outright lie. When sending out documentation or giving a presentation, you must base your statements on accurate information — not exaggerations or optimistic estimates.

If investors press you by asking questions or demanding actual figures from the company, it is better to be forthcoming and honest rather than to exaggerate or manipulate the figures because you feel certain that the investor won’t lose their money. They have a right to get accurate information about your company or your business concept so that they can make an informed decision about whether they invest or not.

The statements you made and the documentation you provided to those investors could play a role in a fraud investigation that leads to criminal charges against you — especially if your investors eventually suffer losses,  Learning when your investment pitch might cross the line into white-collar criminal behavior can help you avoid or better respond to allegations of investment fraud related to an existing business or start-up.

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