E pluribus unum is a latin phrase meaning “Out of many, one.” It is best known as an apt description for the United States, but is equally apt in describing the impact of the nation’s securities laws on individuals. Popular conception has deceitful executives and crooked managers hiding behind an impenetrable series of corporate and organizational group structures. However, the American banking and securities laws have the power delve into these structures and hold individuals accountable for violations.
This article by TELG principal Adam Augustine Carter and TELG managing principal R. Scott Oswald was published by Westlaw Journal Securities Litigation and Regulation on August 6, 2015. The full article is available as a PDF on our site.
Westlaw Journal Securities Litigation and Regulation
E pluribus unum: Individual liability in securities fraud cases
The popular definition of securities or banking fraud, as magnified by the 2008 financial crisis, is a massive-scale fraud perpetrated by a well-known institution. Large institutional fraud is prone to capture national attention, while individual liability actions — with the occasional “Madoff” exception — are not.
Regardless of whether corporations are people, securities or banking fraud always starts with an individual (or set of individuals) who are determined there is more value in breaking the rules than there is in following them.
Corporations are, after all, just collections of individuals acting in concert.
When individuals decide to engage in fraud, they create liability not only for themselves but for other individuals in their organization.