What Is Securities Fraud?

Securities fraud occurs when a stock market investor is caused to make a sale or purchase decision based on false information or without key information. Because of the number of people and the complex system involved, there are many types of securities fraud.

The most common three forms of securities fraud are:

  1. Insider Trading

Illegal insider trading occurs when a person with access to confidential financial information, which is not yet publically available, uses that information to make personally beneficial sale and purchase decisions. For example, a company officer might mention sensitive financial information to her manicurist, who might then use that information to make stock market decisions.

  1. Fraud by the Company

When a company or corporation commits securities fraud, it is often because an officer has inaccurately represented the company’s financial information to its shareholders, which can cause an unnatural rise in stock values. For example, a company might fail to report certain expenses, which causes profits to appear larger than they really are.

  1. Third Party Misrepresentation

With third party fraud, the perpetrator is not someone within the affected company. Instead, he or she spreads misinformation about the stock market in general or about a specific company. This person typically purchases large amounts of cheap stock, uses false information to drive the price up, and then sells the shares.  

Contact the Newark Criminal Lawyer You Can Trust

When you find yourself in the middle of a difficult situation, it’s important to know where to turn. At the Law Offices of Robert J. DeGroot, we are proud of our experience. With several decades under our belts and a dedication to go to bat for each and every one of our clients, you can rely on us to help in your time of need.

We take our jobs seriously, so no matter the charge, if you’re in need of a criminal lawyer in Newark or the surrounding area, we want you to know that we’ll be here for you.

For trusted defense against your securities fraud or other white collar crime charge in the Newark area, contact our experienced attorneys at the Law Offices of Robert J. DeGroot.