Brent M. Brumley | Attorney At Law
Brent M. Brumley | Attorney At Law
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Securities fraud: What to know

On Behalf of | Sep 1, 2022 | Criminal Law |

The world of securities is one of the most tightly regulated economic sectors in cities such as Jackson, Mississippi. Companies and traders have to be incredibly careful with the sharing of information and the use of that information in their financial lives. They have to always be aware of and follow all regulations connected to their securities. By taking these steps, they can make sure to always follow relevant securities laws.

What is securities fraud?

Securities fraud is a general term for federal crimes related to the obtaining of financial securities under false pretenses. It can also involve sales or trades based on some form of lying either to customers, owners, or regulators. In most cases of fraud, a company is lying to the general public about the nature of their company. Any company issuing securities needs to meet strict regulatory guidelines so the public has a general idea of the type of company they are investing in. Fraud involves skirting those rules and obtaining money illicitly from the trades associated with securities.

Insider trading

Insider trading is one of the most common forms of securities fraud. This form of fraud is connected to the fairness rules surrounding trading securities. One important aspect of those rules has to do with when the public knows certain information. Certain information about business deals or product launches could be enormously influential to the price of a security. Regulators want to make sure that the public can compete with investors who may be privy to this sensitive information.

Therefore, they have passed clear laws ensuring that anyone caught trading on inside information illegally will be punished. This information can be as simple as when a company is planning on releasing a report. It can be connected to buying, selling, or informing others about buying and selling. Anyone with that information should refrain from any suspicious trades during sensitive times. They want to make sure their business decisions are as far away from securities fraud accusations as possible.