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. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center