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Crime Overview Securities Fraud

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Also known as stock and investment fraud, securities fraud is a practice wherein investors and securities traders are deceived and manipulated, resulting in theft. Millions of unsuspecting individuals and businesses are affected by securities fraud each year in the U.S., and billions of dollars are lost as a result of securities frauds annually.

Securities fraud can be committed in several ways: when a corporate officer or director makes a material misrepresentation, withholding, or distortion related to stock information, typically pertaining to value; when an individual or entity acts upon the unlawful disclosure of certain confidential stock information; and finally when an officer or director unlawfully discloses confidential information related to a stock.

Internet fraud can also involve securities fraud, when criminals engage in pump and dump schemes, in which false or fraudulent information is disseminated in chat rooms, forums, Internet boards, and email (spam), with the purpose of causing a dramatic price increase in thinly traded stocks.

Securities fraud falls under the white collar crime category, and both federal and state laws govern it. Private investors can sue or take other legal action against the offender(s). A government agency, such as the U.S. Securities and Exchange Commission, can intervene and take legal action.

Securities fraud is a serious offense that can carry both civil and criminal punishments. Criminal investigations may lead to imprisonment. Individuals and businesses can commit securities fraud. Brokers-dealers, financial advisors or analysts, corporations, and private investors are common individuals and groups who are represented by lawyers for securities fraud.

The most common forms of securities fraud are insider trading, accounting fraud, and misrepresentation. Insider trading is trading based on information that is not available to the public. Account fraud is when the individual in charge keeps inaccurate books or presents false information on purpose. Misrepresentation is presenting information that misleads information about a company to an investor or to the public.

Shareholder fraud is another form of securities fraud. This occurs when a company conceals its debts, or lies about its earnings, in order to mislead investors and stockholders. Shareholder fraud may cost people their retirement funds or life savings.

Investment and brokerage houses commit fraud when they offer wrong information to their investors in an effort to manipulate the market.

If you have been accused of securities fraud, whether you feel you are guilty or not, you should hire a criminal lawyer or attorney to help you with your case. Criminal lawyers and attorneys represent individuals who have been charged with crimes by arguing their cases in courts of law. A criminal lawyer or attorney will typically have a private practice concentrating on criminal law.

If you have been arrested for being involved in a securities fraud, you should request an attorney or contact a private criminal lawyer or attorney immediately. There are many things to look for when hiring a criminal lawyer or attorney, including experience in the subject area, a successful record of acquittals, and an extensive knowledge of the applicable statutes and precedents that may affect your case.

If you are suing someone for securities fraud to recover damages resulting from the crime, you will need to hire a civil lawyer or attorney.

If you are ready to contact a criminal lawyer or attorney to help you with your case, visit the American Bar Association. The American Bar Association offers free access to their lawyer locator, a search function that can help you find a suitable criminal lawyer or attorney in your area.