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Securities and Investment Fraud Claims

What is Securities Fraud?
Securities fraud is any deceptive act relating to the purchase, sale or manipulation of securities.  Securities fraud can be committed in a variety of ways, including publishing untrue information on a company's financial statement or SEC filings, insider trading, falsifying information in dealings with corporate auditors, stock manipulation schemes, and stockbroker embezzlement.  

Common Forms of Securities Fraud
Some of the common forms of securities fraud that affect investors include the following:

  • Insider trading

  • Misrepresentation of information about investments

  • Mutual fund fraud

  • Ponzi schemes

  • "Pump and dump" schemes

  • Short selling abuses

  • Unauthorized trading

  • Value manipulation

Investor Fraud Protection and "Blue Sky" Laws

In the aftermath of the Great Depression, an era that was defined by securities fraud, Congress passed a series of legislations designed to protect investors and the markets from fraudulent securities activities.  For example, the Securities Exchange Act of 1934 and Rule 10b-5 protect investors against deceptive and manipulative acts in the purchase or sale of securities.

Additionally, the far majority of states have also passed securities laws (referred to as "Blue Sky" laws) that either mirror or are directly adopted from Rule 10b-5.  Finally, the Financial Industry Regulatory Authority (FINRA) maintains several rules involving securities fraud including IM-2310-2 (churning, false accounts, unauthorized trading, and misuse of customer funds) and Rule 2210 (communications with the public).

Lufrano Law, LLC's attorneys have extensive experience brining fraud claims against both unscrupulous financial advisors and brokerage firms.  Please contact us today for a free, no-commitment consultation.

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