What are the common signs of securities fraud?

Securities fraud is a type of financial crime that involves deceptive practices that are meant to defraud investors. In West Virginia, it is illegal to engage in any activity that is meant to deceive or mislead investors regarding the performance of a security. Common signs of securities fraud typically focus on how a security is being traded or bought. One sign of securities fraud is when an individual or organization attempts to manipulate the market for a security by buying and selling it on their own in order to artificially inflate or deflate its price. This is known as “pump and dump” and is illegal in West Virginia. Other signs of securities fraud can include insider trading, where someone trades on insider information about a security that is not available to the public. Other indications of securities fraud include touting or hyping a security, which is when an individual or organization claims a security is a great investment when in fact it may be risky. Oftentimes individuals or organizations involved in securities fraud will use high-pressure tactics to pressure investors into buying a security, such as calling multiple times, making exaggerated claims, or offering special incentives. Finally, any activity intended to mislead investors, such as false or misleading information about a security, can be considered a sign of securities fraud. It is important to be on the lookout for any suspicious activity related to securities and to do adequate research before investing in any security.

Related FAQs

What is a "false disclosure" in a securities fraud case?
How does the SEC protect investors from securities fraud?
What is a "naked short" scheme in securities fraud?
How is the SEC empowered to investigate and prosecute securities fraud cases?
How do I report a securities fraud case to the SEC?
What are the common defenses used in securities fraud cases?
What are the penalties for securities fraud?
What are the different strategies used to combat securities fraud?
What are the requirements for registering a security?
What is a short sale and how is it used in securities fraud?

What are the common signs of securities fraud?

Related FAQs

Related Blog Posts