Securities Fraud


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.

BREAKING DOWN '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.

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  1. What are the disclosure requirements for a private placement?

    The U.S. Securities and Exchange Commission (SEC) has set forth disclosure requirements for private placements, including ... Read Full Answer >>
  2. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    After a prolonged period of corporate scandals involving large public companies from 2000 to 2002, the Sarbanes-Oxley Act ... Read Full Answer >>
  3. If I write a blog post about stocks I own, is that considered insider trading?

    Writing a blog post about stocks you own is not considered insider trading. The only duty of the blogger is to disclose he ... Read Full Answer >>
  4. Who are the most famous people convicted of insider trading?

    In finance, insider trading refers to the buying and selling of security by a person who has access to material non-public ... Read Full Answer >>
  5. What are the SEC regulations regarding stock splits?

    SEC Rule 10b-17 is the main regulation dealing with stock splits. Rule 10b-17 is an anti-fraud regulation of federal securities ... Read Full Answer >>
  6. Where can I find a company's annual report and its SEC filings?

    Thanks to the Internet, finding financial reports is easier than ever. Nowadays, every reputable company has an investor ... Read Full Answer >>
  7. What happens to the fines collected by the Securities and Exchange Commission?

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