Both laws prohibit various types of criminal conduct. The sections used in criminal prosecutions for fraud in the purchase or sale of securities are section 10(b) of the 1934 law, Rule 10b-5 promulgated under this section, and section 32(a) of the 1934 law. The three types of fraud that can be a basis for a securities violation are Rule 10b-5 material omissions and misrepresentations, insider trading, and parking. The government must prove: (1) omission or misstatement, (2) materiality, (3) willfulness or scienter/knowledge, (4) reliance, and (5) causation. The two broad categories of defenses are intent-based defenses and reliance-based defenses. The three categories of remedies for violations of Federal securities laws are administrative, civil, and criminal. The Securities and Exchange Commission (SEC) has the authority to initiate investigations and to prevent future violations through the civil and administrative enforcement of those laws. The Department of Justice (DOJ) has sole jurisdiction over criminal proceedings; DOJ attorneys generally initiate criminal proceedings as a result of SEC investigations. Penalties include fines and imprisonment. Opportunities for securities fraud have increased as a result of the growth of technology such as the Internet and the increasing interdependence among countries. Footnotes