Stock Fraud Attorneys: A Guide

Securities fraud is a type of fraud that encourages investors to purchase securities, stocks or other investments under pretenses. This type of fraud can occur when the companies and agents acting for the companies encourage fraud to occur. Investors typically make a purchase decision based upon false or misconstrued information and often lose large amounts of money. You can discover more online.

There are so many levels of securities fraud that a common broker must be extremely careful. Insider trading, misleading investors, falsifying documents and other actions are all punishable cases of securities fraud. Cases that involve securities fraud are investigated by both the Securities and Exchange Commission and FBI. Martha Stewart was convicted of securities fraud several years ago for insider trading of certain stocks.

Corporate securities fraud involving companies such as Enron and Countrywide has become extremely common over the past decade. Corporations either alter their paperwork to make their accounts seem better on paper or they act in bad faith to customers allowing business to occur that will end with bad results for investors. The sub prime mortgage crisis involved securities fraud because the sub prime mortgages were bundled together and sold as mortgage-backed securities. These securities had a high risk but were bought up by the thousands by banks and investors. When the high rate of default occurred, many of the returns on these securities were drastically reduced. Youcan go to this company for quality legal services.

Penny stocks have been increasingly used in securities fraud. Many "boilerhouse" firms will push the sales of these stocks as some of the "hottest" companies around. They will state that if you purchase the stock today, they will see it increasing by thousands of percent within a short period. While some penny stocks pay off like this, it is very rare to see the type of returns that a scam like this will indicate. Many thousands of individuals are left with less cash and a sour feeling in their mouth about the stock market because they have fallen victim to securities fraud.

Securities fraud can cost the economy as much as $40 billion dollars per year. Some experts estimate the costs are even higher! Paying attention to what investments that you choose as well as checking past performance is a good idea for any investment. Do not place money in an investment simply because you were asked to. Research the investment and ensure that you are the type of person who wants the risk and possible reward. The prime targets for securities fraud are people over the age of fifty. When an investment company or potential investment sales person keeps stating how excellent their revenue and assets are while stating that their costs and liabilities are very low, it is most likely securities fraud.

Securities fraud can affect anyone. The Internet has brought many more cases of the crime forward. Be careful when you are choosing where to invest because securities fraud can effect anyone at any time. Here's how an individual trades in the stock market: