Securities fraud is a serious concern with far-reaching financial and legal implications. From Ponzi schemes to insider trading, it’s essential to recognize common types of securities fraud so that you know what to watch out for.
This blog post will provide an overview of the different types of securities fraud so you can gain greater insight into what can ultimately lead to serious charges. Here are four of the most common accusations:
1. Insider trading
When someone gains knowledge of confidential information not available to the public and uses it to gain an unfair advantage, they engage in insider trading.
2. Market manipulation
Market manipulation is a form of fraud that occurs when traders or investors artificially inflate or deflate the price of a security. This is usually done by spreading false rumors, providing misleading reports, fabricating stories, and sometimes engaging in illegal insider trading.
3. Ponzi schemes
Many times a person will promise an investment with high returns. However, they are actually paying their initial investors with funds from new investor money instead of profits from legitimate investments.
4. High-yield investment programs (HYIPs)
These investment programs offer unusually high returns to investors but have been proven to have no actual investments behind them.
As a securities trader, it’s essential to be mindful of potential business violations. In many instances, securities fraud can lead to substantial financial penalties or even criminal charges. If you are accused of fraud, you can protect your future, career, reputation and finances if you understand the importance of taking immediate steps to secure your defense. With the right help, you can fight any false accusations with confidence.