Securities Fraud
Securities fraud, also known as investment fraud and stock fraud, is a type of financial misconduct that involves misrepresentation or deception resulting in investors suffering financial losses. It occurs when someone misrepresents material facts related to an investment—such as its value, profitability, prospects, or costs—in order to induce other people to invest. Securities fraud can take many forms, including Ponzi schemes, insider trading (when people illegally trade based on non-public information), pump and dump schemes (where promoters artificially inflate the price of a security before cashing out at the expense of other investors), and more.
The U.S. Securities and Exchange Commission (SEC) is responsible for regulating securities markets in America and enforcing laws against securities fraud. To protect themselves from becoming victims of securities fraudsters, potential investors should always research any prospective investments thoroughly before making decisions about them; they should never rely solely on representations made by others without verifying those claims independently. Additionally, it is important for investors to monitor their accounts closely so they are aware if there are any suspicious activities taking place with regards to their investments. Finally, if something seems too good to be true then it probably is – be wary of get-rich-quick promises!
