Securities fraud, also known as stock fraud, is a serious crime that deceives investors in the stock market. Fraudsters manipulate investors’ decisions by providing false information for their own personal gain. This can involve spreading lies about a company’s performance or using inside information about a company to trade stocks unfairly. This type of fraud can take many forms, with perpetrators acting as brokers, investment firms, or even individuals or companies themselves. Their deceptive maneuvers aim to manipulate investors through false information, ultimately causing financial harm for the perpetrator’s personal gain.

The prevalence of securities fraud is concerning. The SEC, the government agency responsible for protecting investors, secured nearly $5 billion in financial remedies for fiscal year 2023, the second-highest amount in its history. This highlights the ongoing threat of securities fraud and the importance of effective enforcement measures.

The SEC defines a “security” broadly to encompass various financial investment products. This includes traditional stocks and bonds, but also digital currencies and other investment contracts. “Fraud” refers to the deliberate act of deceiving someone for financial gain. Therefore, securities fraud can involve manipulating any type of security, causing significant financial harm to unsuspecting investors.