What are the common signs of securities fraud?
Securities fraud is any type of fraud that involves the buying or selling of securities such as stocks, bonds, mutual funds, and other financial instruments. In the state of Washington, securities fraud laws exist to protect investors from deceptive and potentially illegal practices. Common signs of securities fraud include overly aggressive sales pitches from stockbrokers, unsolicited calls from brokers, unrealistic promises or guarantees of high returns, pressure to invest quickly, false or misleading information, or suspicious remarks about the stock market. Stockbrokers may also attempt to hide risk information or exaggerate potential gains of investments. Securities fraud is also more likely to occur when public companies are involved, often including insider trading or other illegal activities. Signs of fraud in public companies can include insider trading, sudden large changes in stock prices, unusual amounts of trading in a specific stock, unusual activity in terms of dividends or other financial instruments, and sudden changes in the company’s finances. If you suspect that you have been a victim of securities fraud, contact your local state securities regulator or the federal Securities and Exchange Commission (SEC) as soon as possible. The SEC can provide tips for avoiding fraudulent investment schemes, as well as resources for reporting and investigating suspected securities fraud.
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