Submit your Stock Fraud claim details for a free, no obligation case review.
Get Started:
more_legal_areas stock_fraudThere are several types of stock fraud that consumers should be aware of. These types of stock fraud are avoidable for the most part when consumers are aware of the signs and signals of potential fraud. Fraud is defined as deliberate deception carried out in order to secure unfair or unlawful financial gain at the expense of another.
Twenty five million adults- more than 11 percent of the adult population- become victims of fraudulent crimes each year in the United States. The types of stock fraud that a person can fall victim to depends on the perpetrator of such fraud and the method through which fraud is carried out.
Different stock or securities entities can perpetrate different types of stock fraud. Brokers and dealers can commit types of stock fraud by misleading clients or acting on insider information. Financial advisors and analysts can commit various types of stock fraud by maliciously offering poor advice or misleading information to their clients. Corporations can commit various types of stock fraud when the hide or distort information about the company''s financial status or activities, or if they deceive their investors and clients in any way. Private investors also commit stock fraud when they act on inside information in order to gain advantage in the securities market.
There are some specific types of stock fraud that a stock broker can commit. Churning is a type of stock fraud that occurs when a stock broker benefits from excessively buying and selling stock in order to obtain higher commissions. Unsuitable investment choices on behalf of a stock professional can be fraudulent when this entity purposely chooses investment options that are not in a client''s best interest. If a stock professional excessively concentrates a client''s investments into one sector of the market, they knowingly subject their client to an increased risk of financial loss. Stock professionals are also guilty of types of stock fraud when they misrepresent or conceal any portion of a transaction from their clients, fail to follow a client''s instructions, or misappropriate a client''s assets in order to secure personal or company gain.
The federal Securities Exchange Commission was established in 1934 in order to protect consumers from these types of stock fraud. This agency establishes laws that regulate the stock and securities industries to ensure that they conduct fair and honest business practices and do not commit these types of stock fraud. This agency has investigative responsibilities and is able to prosecute offenders of all types of stock fraud.
Types of stock fraud can be committed in the course of a professional relationship between a client and a stock professional, but they can also occur through other means. Some types of stock fraud can be perpetrated over the internet. Fraudulent websites may provide false or misleading information to consumers in order to secure financial gain at another''s loss.
When types of stock fraud are committed, victims have the legal right to seek compensation for their losses through a civil lawsuit with the help of a qualified attorney.
A recent Securities and Exchange Commission (SEC) survey of 15 large brokerages shows that 13 of them appeared to give preferential treatment to fund companies from whom they received financial compensation. Techniques ranged from featuring the fun...