Person writing in a notebook with documents in front of them

What Is a Securities Fraud?

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.

Forms Of Securities Fraud

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.

Market Manipulation

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.

Misinformation

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.

 Ponzi And Pyramid Schemes

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.

Pump And Dump

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.

Class Actions Can Hold Fraudsters Liable

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.

Seek Compensation For Investment Fraud Losses With Silver Law Group

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.

Client Testimonials
star star star star star
"I cannot say enough how pleased I am with the services provided by Silver Law Group. If you need assistance in recouping your losses due to your broker's misconduct, give them a call!"
- Adam F.
star star star star star
"Scott and his team represented me this week and I cannot say enough about the professionalism they had. Simply put, if you want the best outcome, you hire the best. Look no further than this firm. Thanks again Scott!!"
- Scott Ainsworth
star star star star star
"Silver Law Group's assistance in handling my mother's case was invaluable. The attorneys guided us throughout the whole process and was successful in recovering my mother's losses."
- Rebecca F.
star star star star star
"Mr Silver, Mr Schwamm, Amanda and Rebecca were all wonderful to work with. They were professional, pleasant and caring. I was so pleased with their accessibility, promptness in answering my question and the outcome reached. I highly recommend them."
- Donna Schwartz
star star star star star
"Having been a Texas trial lawyer for 38 years, I have worked with and against hundreds of attorneys and know what makes them good and bad at their job. I was so fortunate to have Scott Silver represent me. I..."
- Richard Dodd
star star star star star
"Scott Silver handled my mother's securities arbitration case and did an outstanding job. Not only did he negotiate a great settlement but, then, brought a second action after determining that the defendant failed to produce all documents during discovery. He,..."
- Matthew Weiss

Get In Touch

Fill out the contact form or call us at (800) 975-4345 to schedule your free consultation.

  • Contingency-Based Fee
  • No Fee Unless You Win
  • Recover Your Investment Losses