How is securities fraud committed?

Securities fraud is the illegal act of deceiving investors for personal gain. This type of fraud is committed by manipulating the stock market in order to increase the value of stocks, convincing investors to purchase stocks that are overvalued, or providing false information about a company’s financial situation. In Virginia, securities fraud is punishable under the Virginia Securities Act, which states that it is illegal to give false or misleading information about the purchase or sale of securities. It is also illegal to act as a broker-dealer or investment adviser without being licensed and registered with the Virginia State Corporation Commission. Securities fraud can take many forms such as insider trading, inappropriately trading securities, failure to disclose important information, and misappropriating investor funds. Insider trading involves the purchase or sale of securities based on private information secured due to a position of trust or confidence. Inappropriate trading occurs when a broker-dealer makes risky trades for clients without their knowledge or consent. Failure to disclose important information can involve omitting negative details about a company, such as financial losses or the sale of assets. Misappropriating investor funds involves taking funds for personal gain, such as making loans to a business partner or family member. It is important for Virginia residents to be aware of the risks of securities fraud so that they can protect themselves and their investments. By understanding the various methods by which securities fraud is committed, Virginians can ensure that their investments are safeguarded.

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