What are the common signs of securities fraud?
Securities fraud is a serious crime, and investors should know the signs of potential fraudulent activity to protect themselves. In California, it is illegal for any person to engage in any act, practice, or course of business which operates as a fraud or deceit upon any person. Common signs of securities fraud include: 1. Unsolicited offers. Be wary of unsolicited offers to purchase or sell securities, or promises of high or guaranteed returns. 2. Misrepresentation of facts. Be aware of any false or misleading statements made by someone selling investments or giving financial advice. 3. Pressure to purchase or sell. Avoid any investment offer that requires you to make a quick decision. 4. Unfamiliar investments. Be cautious of investments that sound too good to be true or that you know little about. 5. Unlicensed brokers. Be sure that the person offering the investment is registered with the appropriate regulatory authority and has the necessary training and license. 6. Insider trading. If you get information not available to the public that could influence the stock price, it is illegal to use this information to trade securities. Investors should always do their due diligence before investing and should report any suspicious activity to the regulatory authorities. If you are a victim of securities fraud in California, contact the Attorney General’s office or the California Department of Business Oversight.
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