Securities Fraud
Securities fraud is defined as deliberately giving misinformation to another party related to the trading of securities such as stocks or bonds. There are several parties that can be found guilty of securities fraud, including:
- Securities brokers
- Corporations
- Securities analysts
- Private investors
Types of Securities Fraud
There are several types of securities fraud, including:
- Submitting incomplete or incorrect information to the Securities and Exchange Commission (SEC)
- Deliberately misleading an investor to his or her financial detriment
- Knowingly issuing poor advice about securities
- Insider trading
How to Fight Securities Fraud
If a private investor has been the victim of securities fraud, there are two options open to recoup losses.
The first option is to file a civil lawsuit in court or present the case to a self-regulatory organization (SRO). SROs are organizations that create and enforce rules for their members (brokers, dealers, etc.). Private investors will often find that they may be contractually bound by their brokerage firm to have the case settled by an SRO.
The second option is to report the fraud to the SEC. If the SEC decides that securities fraud may have been committed they can file a suit in federal court or have the case heard by an independent administrative law judge. In either case, if securities fraud was committed, the judge may order that monetary compensation be paid to the investor(s), restrict further securities practices of the guilty party, and/or order further investigation into the guilty party’s financial history.
If you believe that you or a loved one has been a victim of securities fraud, you may want to contact a securities fraud attorney for more information.
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