Securities Fraud

AAA

DEFINITION of 'Securities Fraud'

A type of serious white-collar crime in which a person or company, such as a stockbroker, brokerage firm, corporation or investment bank, misrepresents information that investors use to make decisions. Securities Fraud can also be committed by independent individuals (such as by engaging in insider trading). The types of misrepresentation involved in this crime include providing false information, withholding key information, offering bad advice, and offering or acting on inside information.

INVESTOPEDIA EXPLAINS 'Securities Fraud'

Allegations of securities fraud are investigated by the Securities and Exchange Commission (SEC) and National Association of Securities Dealers (NASD). The crime can carry both criminal and civil penalties, resulting in imprisonment and fines. Some common types of securities fraud include manipulating stock prices, lying on SEC filings, and committing accounting fraud. Some famous examples of securities fraud are the Enron, Tyco, Adelphia and WorldCom scandals.

RELATED TERMS
  1. Certified Fraud Examiner - CFE

    A professional certification available to fraud examiners. The ...
  2. High-Yield Investment Program - ...

    A fraudulent investment scheme that purports to deliver extraordinarily ...
  3. Stuffing

    The act of selling undesirable securities from the broker-dealer's ...
  4. Corporate Fraud

    Activities undertaken by an individual or company that are done ...
  5. Insider Trading

    The buying or selling of a security by someone who has access ...
  6. National Association Of Securities ...

    The NASD was a self-regulatory organization of the securities ...
Related Articles
  1. SEC Filings: Forms You Need To Know
    Investing Basics

    SEC Filings: Forms You Need To Know

  2. The Pioneers Of Financial Fraud
    Investing Basics

    The Pioneers Of Financial Fraud

  3. Policing The Securities Market: An Overview ...
    Investing Basics

    Policing The Securities Market: An Overview ...

  4. Where can I find a company's annual ...
    Investing

    Where can I find a company's annual ...

comments powered by Disqus
Hot Definitions
  1. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  2. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  3. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  4. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  5. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  6. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
Trading Center