How are cases of securities fraud investigated?

Cases of securities fraud in California are investigated by the California Department of Business Oversight (DBO). The DBO is responsible for investigating complaints and allegations of securities fraud as well as enforcing the state’s securities laws. The DBO has a variety of investigative tools and techniques at its disposal. First, the DBO may send investigative letters to the parties involved in the alleged violation of securities fraud laws. These letters provide the parties an opportunity to provide documents or other evidence to support their position. If the DBO finds evidence of a violation of the law, it may initiate an administrative proceeding. The DBO may also conduct on-site examinations of companies suspected of engaging in securities fraud. During these examinations, the DBO will review company documents, interview witnesses and collect other evidence to determine if fraud has occurred. The DBO may also work with other agencies, such as the Securities and Exchange Commission or the Federal Bureau of Investigation, to investigate securities fraud. These agencies may provide the DBO with leads for potential violations or provide assistance in investigating the case. The DBO is responsible for determining whether or not investors have been defrauded in any securities transactions. If the DBO finds that fraud has been committed, the individuals or companies involved may face sanctions, including fines and loss of investor funds. In some cases, criminal charges may be pursued against those who have been found to have engaged in securities fraud.

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