What is securities fraud?

Securities fraud, also known as investment fraud, is a type of financial crime in which someone intentionally misrepresents or omits information related to a security or investment. The perpetrator does this in order to induce someone else to buy or sell a security for a profit that the perpetrator stands to gain. It is illegal in Washington and most other states. Securities fraud can take many forms. It could involve insider trading, where people who have knowledge of confidential information related to a security take advantage of that information to purchase or sell a security. Other forms of securities fraud include stock manipulation, where a person artificially inflates or deflates the price of a security for their own gain. Finally, there is pump and dump, which is when someone buys a security and then spreads false information to try and drive the price up so they can sell the security at a higher price than what they paid. Securities fraud is a serious crime that carries significant penalties. If found guilty, perpetrators of securities fraud can face stiff fines, civil penalties, and even criminal prosecution. It is important to protect yourself from investment fraud by doing research, speaking with a financial advisor, and never making decisions based on tips from strangers.

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What is securities fraud?

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