What is securities fraud?

Securities fraud, also known as stock fraud and investment fraud, is a type of white-collar crime that occurs when someone misrepresents or omits financial information or makes false statements in connection with the purchase or sale of securities to defraud investors. In Iowa, securities fraud is defined as “the offering or selling of a security in violation of any of the statutes and/or regulations regarding the offering and sale of securities in this state.” Examples of securities fraud include insider trading, manipulating stock prices, and selling unregistered securities. Securities fraud can also be committed by brokers who make unsuitable recommendations, use excessive markups or markdowns, or misappropriate customer funds. In Iowa, the Iowa Insurance Division is responsible for handling complaints about securities fraud and other investment-related activities. Anyone affected by securities fraud has the right to file a complaint with the Insurance Division and request that a hearing be held to resolve the issue. Individuals in Iowa who suffer losses as a result of securities fraud may be eligible for civil remedies, such as getting their money back, and/or criminal penalties, such as fines and jail time.

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What is securities fraud?

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