The Law Office of Jessica Koester, LLC

The Law Office Of
Jessica Koester, LLC

FREE CONSULTATION  
AVAILABLE 24/7  
  618-307-4192
FREE CONSULTATION  AVAILABLE 24/7   618-307-4192

FREE CONSULTATION 24/7  |  618-307-4192

A breakdown of securities fraud

| May 26, 2021 | Blog

There are many different types of white-collar crimes that are committed in Illinois. One of the most unfamiliar is called securities fraud. You may also hear this kind of fraud referred to as investment or stock fraud.

Who commits securities fraud?

Various persons and entities commit this type of white-collar fraud. It could be committed by an individual, like a stockbroker. Or an organization, like an investment bank or a brokerage firm, could commit fraud. Sometimes, employees of a company may commit this type of fraud without even realizing it.

Securities fraud defined

Securities fraud is a type of white-collar fraud in which unethical activity is carried out to misrepresent information to investors. This is done with the intent to help a person or entity reap financial gain. There are many types of fraudulent activities that fall under the broad term “securities fraud.” Some of the most popular include pyramid schemes, late-day trading, broker embezzlement, hedge-fund-related fraud, advanced fee fraud, high-yield investment fraud and Ponzi schemes.

There are four main components involved in a securities fraud scheme. First, the person or entity will distribute false information to investors. Second, he, she or it will withhold key information from these investors. Third, the perpetrator will offer bad advice to investors to get them to act in a manner that he or she desires. Lastly, the individual or organization will act on inside information. When all these four components are present, then a person or entity may be charged with securities fraud.

The FBI considers securities fraud to be a large problem. Those who are charged with committing securities fraud will likely have an uphill battle throughout their court case. For this reason, it’s advisable to hire an attorney to assist with the case.

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