Types of Securities Fraud

 

Understanding the different types of securities fraud can help you in detecting it. Securities fraud occurs when someone makes a false statement about a company or the value of its stock, and others makes financial decisions based on the false information. Talking to one of the attorneys at Robinson, Seiler & Anderson in Utah County can inform you on what to do when you encounter securities fraud. Listed below are some of the types of securities fraud you should be on the lookout for.

 

Fraud by the Company

The first type of securities fraud occurs when an officer or director of a corporation doesn’t accurately report the company's financial information to its shareholders. This can raise the worth of the company’s stock and encourage investors to buy shares of an unhealthy company. If the company goes bankrupt the people who bought shares based on false information lose their investment completely.

 

False Information from a Third Party

When a third party gives out false information about the stock market or a particular company or industry is a common type of securities fraud. Also known as “pump and dump” in this scheme, a person will find a small, unknown company with cheap stock and buy large amounts of its shares. The perpetrator will then send out false information about the company to encourage others to buy the stock, driving up the price. Once the price of the stock is high enough, the perpetrator sells his or her shares for a profit.

 

Insider Trading

Insider trading occurs when someone with confidential information about a company's financial state uses that information to make decisions about whether to buy or sell the stock before that information is disclosed to the public. Buying or selling stock before disclosing information to the board is known as insider trading.

 

Securities fraud can be easy to avoid and detect with the help of one of the experienced attorneys at Robinson, Seiler & Anderson in Utah County. For more information about our firm and how we can help you in your business give us a call today.

View Our Testimonials Announcement

Norman H. Jackson, Utah Court of Appeals Judge, Retired, has joined the law firm of Robinson, Seiler & Anderson, LC, effective April 2017.  Judge Jackson was one of the seven founding Judges of the Utah Court of Appeals and served terms as Presiding and Associate Presiding Judge.
 
Judge Jackson was the senior attorney in a Richfield law firm for eighteen years.  The firm engaged in legal, business and tax cases, including practice before State and Federal Courts, U.S. Board of Land Appeals, Utah Public Service Commission and Arizona Corporation Commission.  Clients included counties, cities, banks department stores, communications and credit associations, irrigation companies, auto dealers, building supply stores, farmers, ranchers and small businesses. They took “every type of case that came through the door,” from criminal defense work to a patent royalty dispute for the inventor of the Frisbee. Judge Jackson has been a lifetime rancher doing business in Utah as Jackson Cattle Company and Arizona as EJ Cattle Ranches.
 
Judge Jackson’s professional service includes terms on the Utah State Bar Commission, Bar Foundation (President and Vice President), Air Travel Commission, and Utah Information Technology Commission.  He served on the Judiciary’s Alternate Dispute Resolution Committee for thirteen years and initiated and supervised the Appellate Court Mediation Office.  He developed and advanced a realistic and workable framework for both of Utah’s Appellate Courts to use in reviewing trial court and administrative agency decisions.  He published three editions of Utah Standards of Appellate Review while participating in more than 2,000 appellate court decisions.  
 
Judge Jackson’s experience will complement the other outstanding lawyers at Robinson, Seiler & Anderson, LC.  The firm will continue its representation of injured individuals, as well as clients in real estate, business, estate planning, tax, contract and education matters.
 

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