Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of securities laws.
In law, fraud is deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.
An investor allocates capital with the expectation of a future financial return.
The stock of a corporation constitutes the equity stock of its owners.
Martin Shkreli Arrested on Securities Fraud Charges by Bloomberg
Offers of risky investment opportunities to unsophisticated investors who are unable to evaluate risk adequately and cannot afford loss of capital is a central problem.
Martin Shkreli Arrested On Charges of Securities Fraud by DAHBOO77
Securities fraud can also include outright theft from investors, stock manipulation, misstatements on a public company's financial reports, and lying to corporate auditors.
Market manipulation is a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a security, commodity or currency.
Psychological manipulation is a type of social influence that aims to change the behavior or perception of others through abusive, deceptive, or underhanded tactics.
The term encompasses a wide range of other actions, including insider trading, front running and other illegal acts on the trading floor of a stock or commodity exchange.
Front running, also known as tailgating, is the prohibited practice of entering into an equity trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large pending transaction that will influence the price of the underlying security.
Insider trading is the trading of a public company's stock or other securities by individuals with access to nonpublic information about the company.