As civil cases cannot result in jail time, no one involved in the Stansberry Investment scam went prison, notes Knowledge@Wharton. However, the Securities and Exchange Commission's civil lawsuit against Pirate Investor LLC and Frank Porter Stansberry, in 2007, did result in judgment of $1.5 million in restitution and damages, according to The Baltimore Sun.Continue Reading
The SEC opts to bring civil suits for securities fraud because the burden of proof is less, explains Knowledge@Wharton. Criminal cases require the prosecution to prove that the defendant committed the actions deliberately and beyond reasonable doubt, while the level of proof in civil cases is only that the preponderance of evidence shows guilt. Prosecutors are also reluctant to bring criminal charges in securities cases because judges, juries and the prosecutors do not have the specialized training or research staff necessary to pursue the cases.
The SEC itself does not have the ability to enforce criminal charges, notes the American Bar Association. The U.S. Department of Justice or regional prosecutors must handle any criminal cases.Learn more about Crime