Securities Fraud

August 18th, 2011 | Author: | Law

Fraud is a term used to describe a broad range of criminal activities, all of which involve the intentional deception of others for the purpose of personal gain. Securities fraud refers to a type of fraud which involves investments in the stock or commodities markets. Securities fraud is a specific type of investment fraud, typically investigated by the SEC or other federal agencies in the United States.

In most cases, securities fraud involves providing false information to investors in order to convince them to make poor investment decisions. One of the most common examples of this is when a business provides false information about its financial status to temporarily raise its stock price. Unfortunately, because of the complexity of modern investing, some individuals may unknowingly or accidentally commit securities fraud.

Types of Securities Fraud

There are a number of different illegal investing activities that may be considered securities fraud. Among others, these include:

  • Internet fraud – known as pump and dump schemes, this type of securities fraud involves spreading false information on the internet, in chat rooms and discussion boards, to temporarily inflate a stock price before those spreading the information sell off their holdings in the company.
  • Insider trading – making investment decisions based on non-public information.
  • Microcap fraud – involves the fraudulent sale of stocks in companies worth less than $250 million.
  • Accounting fraud – falsifying financial records in order to improve the appearance of financial stability.

These and other common forms of securities fraud are serious crimes, and an individual convicted of these crimes may face significant social and criminal consequences.

Contact Us

If you or someone you know has been accused of committing securities fraud, your livelihood and reputation are at stake. Contact the Houston criminal defense lawyers of Johnson, Johnson & Baer, P.C., today at 713-222-0400 to discuss your case with an experienced legal professional.



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