The
violation of federal and state securities investing and trading laws is known
as securities fraud. This can include a stockbroker who gives bad investment
advice, or who doesn't explain the risks of his recommended investments, or who
makes unauthorized or unnecessary trades on your account. It can also include
companies that make false statements or withhold information about their
prospects. One securities fraud example was the infamous Enron scandal, which
allegedly involved top executives manipulating financial reports and filing
false tax reports.
Even after you've lost money, you have rights if
you believe you are a victim of securities fraud. In some cases you may wish to
consult an attorney and consider suing a publicly traded company, while
stockbroker fraud may be handled through a binding arbitration (dispute-resolution)
process.
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