Securities fraud is a catch-all term that encompasses various types of unethical and illegal activity involving investments. Securities fraud means intentionally inducing someone to purchase or sell an investment with the intent to profit at the investor’s expense.
Even sophisticated investors can be the victims of securities fraud. Contact Silver Law Group for representation if you lost money in a fraudulent scheme involving securities, like stocks.
There are several common methods scammers use to swindle money out of investors or profit at other investors’ expense. Silver Law Group represents investors who have fallen victim to many types of securities fraud.
Technology can be an effective tool for people trying to manipulate the financial markets for their own gain. For example, in a cross-market manipulation scheme, fraudsters could initiate a spike in trading in Europe and then reap profits from their U.S. holdings when the New York Stock Exchange opens a few hours later.
Another common market manipulation scheme involves placing advance orders to buy or sell a stock at a range of prices over a few hours or days. The increased activity spurs others to buy or sell the stock. The schemers then cancel those orders, causing uninvolved investors to take losses.
Disseminating incorrect information about an investment may be the most common form of investment fraud, which can involve company officials, accountants, brokers, and others.
The company’s public statements about its profits, liabilities, executives, business plans, and other relevant information drive the price of its stock. Companies or individuals sometimes intentionally disclose inaccurate or incomplete information that affects investors’ decision-making.
These are different types of securities fraud, but what they have in common is a promise of high returns on investment. Ponzi schemes rely on a constant influx of new investors to pay returns to earlier investors. Pyramid schemes allow people on the higher reaches of the pyramid to benefit from investments made by people newly entering the scheme.
A Pump-and-Dump scheme involves stockholders spreading false information to induce more investors to buy. The increased demand usually increases the price. When the price reaches a certain level, the perpetrators dump their stock, reaping large profits while later investors lose money.
When investment fraud results in a financial loss, suing the fraudsters individually may not be practical for most smaller investors. The costs of litigation might be high compared to the amount they could expect to collect if the suit were successful.
Class action securities fraud lawsuits provide a remedy for multiple small investors who were victimized. Once one investor files a lawsuit alleging fraud, all investors who were harmed by the same scheme can join in the suit, sharing the costs and the proceeds.
Sometimes one investor’s losses are significantly different from other investors in the class, or arise from a different set of events. In that case, an individual lawsuit may be possible.
Silver Law Group are investor advocates representing small and large investors in securities fraud class action lawsuits. If you lost money due to securities fraud, we will provide aggressive representation to hold the fraudsters accountable. Contact us right away to discuss the possibilities.
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