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Securities Fraud and Stock Fraud

Stock fraud typically occurs when the issuer of the security makes false statements about the company's status or fails to disclose important facts that may affect stock value. Due to this inaccurate information, investors are induced to purchase securities at artificially inflated prices. Securities lawyers can help consumers with cases involving investment securities and stock fraud.


Securities and Stock Fraud: Personal Stories and Interviews

Stock Fraud: Has This Happened To You?

Jane Auerbach lost almost all her savings and her husband's life insurance. Because she trusted a stock broker. [MORE: TRUSTING A STOCK BROKER]

CVQ Technologies Stock Fraud: “Everything looked good.”

When Greg Silber and his informal network of fellow investors set out to make their fortunes three years ago, they thought that CVQ Technologies looked good. They hoped to make some money from the up-and-coming natural health products company; what they got instead was a nasty dose of stock fraud. [MORE: TECH STOCK FRAUD]


More About Securities Fraud and Stock Fraud
stock Securities fraud class action lawsuits can be brought against the persons or entities that violated the Securities and Exchange Act of 1934 (the "Exchange Act") and/or the Securities Act of 1933 (the "Securities Act"). Claims can be brought against the issuer of the security, i.e. the public company, the company's officers, directors, or others involved in the violation, including stock brokers, underwriters, or auditors.

Some examples of Investment Fraud by public companies include:
  • Misrepresentations - the company announces false statements or omits details of the company's financial status or sales performance with intent to attract and retain investors.

  • Violations of the Generally Accepted Accounting Principles (GAAP).

  • Illegal Insider Trading - employees or officers of the company trade stocks based on non-public information.

  • Violations of Employee Retirement Income Security Act (ERISA) - the company's trustees breach their fiduciary duty by allowing employees to trade stock at artificially inflated prices due to undisclosed problems.

  • Industries that have experienced stock fraud and securities fraud lawsuits in 2004-2005 include insurance, technology, communications, medical, and utilities.
Some examples of Stock Broker Fraud by stock brokers and brokerage companies include:
  • Misrepresentation/Omission - a broker intentionally misleads or does not disclose details and risk factors of a certain stock to the client.

  • Unsuitability - a broker recommends investments/stocks that are unsuited for the client's risk level and finances.

  • Churning - a broker conducting an unnecessary quantity of transactions which generate profit per transaction fees for the broker.

  • Overconcentration - a broker fails to diversify a client's investment portfolio.

  • Tipping - brokers and brokerage houses tipping clients to buy or sell securities based on non-public information. Also referred to as Illegal Insider Trading which includes brokers selling IPO, pre-public stocks to favored clients/friends.


Read More Stock Fraud Articles

Marc Gabelli Sued by SEC for Alleged Securities Fraud

Former money manager, Marc Gabelli, was sued by the SEC on Thursday April 24, 2008 in U.S District Court for the Southern District of New York for securities fraud. The SEC alleges that he allowed a hedge fund to quickly trade the shares of a mutual fund that he was managing. COO Bruce Alpert has also been sued in the case. [MORE: SEC FRAUD]

Flathead Company and Residents Accused of Securities Fraud

What Style 'N Tile said they wanted to do was successfully sell their bathroom and kitchen tiles, displaying the licensed artistic works of Van Gogh and other artists, to large retailers. Instead, those investing in the company's innovative idea found themselves missing $1.1 million dollars. [MORE: FLATHEAD COMPANY ACCUSED OF SECURITIES FRAUD]

Charges Possible Against Three Firms for Securities Fraud

At least three firms have been notified by the Securities and Exchange Commission that plans are being made for charges to be filed against the firms. This news comes after a 14-month investigation into interest-rate swaps in the municipal market and bid rigging of guaranteed investment contracts. [MORE: POSSIBLE CHARGES AGAINST THREE FIRMS]

Securities Fraud: MBIA Gambled… and You Lost

The trouble with tottering giants is that they can take down a lot of smaller people with them if they fall. That's the trouble with the tottering bond insurer MBIA as it struggles to stay afloat after a plethora of risky investments have undermined its stability. Those investments, and MBIA's less than forthright communications about them, are also fueling a growing number of class action suits charging securities and stock fraud. [MORE: MBIA SECURITIES GAMBLE]

Securities Fraud Litigation by the Numbers

It's not the record of 2002 when the Enron scandal drove the number of stock fraud lawsuits to 267 for just the second year in the New Millennium. However, 2007 looks like it's going to be a banner year just the same, and given the sub prime mess, it would surprise no one if 2008 appeared to be on track for securities arbitration. [MORE: SECURITIES FRAUD LITIGATION]

Securities Fraud: Class Action Suits Follow Cellcyte Stock Collapse

Startup biotechnology companies like Kirkland-based Cellcyte Technologies often raise investment capital by aggressively promoting their products and potential earnings. That's fair enough; but Cellcyte's promotion campaign, and its consequences, look a lot more like well crafted securities fraud than legitimate marketing. [MORE: CELLCYTE SECURITIES FRAUD]

Stock fraud: A beginner's guide to knowing your rights

Investors - especially small investors - have lost millions upon millions of dollars due to stock fraud. The scandals of recent years are still fresh in the minds of anyone with even a small stake in the stock market. While we're all familiar with the scandals of Enron, most of us don't know the fine print. If you've got money in the stock market, now is the time to learn your rights. [MORE: STOCK FRAUD RIGHTS]

Investors Beware: White Collar Crime and Stock Fraud is on the Rise

U.S. investors have lost millions of dollars due to corporate stock fraud. To fight back, LawyersandSettlements.com keeps investors informed with Securities Alerts and stock fraud news; LawyersandSettlements.com also provides access to legal help. [MORE: STOCK FRAUD ON THE RISE]

 
Stock Fraud Press Releases
MAY-01-08: On April 29, 2008 a 72-year-old man was sentenced to 330 years in prison for a high yield investment scheme. The scheme included securities fraud, mail fraud, and wire fraud. The man, Norman Schmidt, was found guilty after an eight week trial concluded on May 29, 2007. [MORE: INVESTMENT FRAUD]

APR-18-08: It was announced on Friday April 18, 2008 that a class action lawsuit has been filed against Walgreen Co. on behalf of those who purchased the company's common stock between the dates of June 25, 2007 and November 29, 2007. [MORE: WALGREEN CLASS ACTION]

securities fraudAPR-01-08: Twenty-one people have been arrested because of their connection to a securities fraud ring that netted approximately $50 million by scamming investors. The New Jersey State Attorney General Anne Milgram said the scheme was operating from Miami, Florida and Sao Paulo Brazil and was using the securities market in New Jersey to conduct their scheme. [MORE: TWENTY-ONE ARRESTED]

MAR-11-08: A criminal investigation has been opened against Countrywide Financial by the FBI and the Justice Department for possible securities fraud. The FBI and the Justice Department is investigating whether or not the nation's largest mortgage lender falsified its financial condition and the stability of its loans in security filings. [MORE: INVESTIGATION OPENED FOR COUNTRYWIDE FINANCIAL]

Securities In the News
FEB-11-08: Duncan-Williams Inc. of Memphis, Tenn. was ordered last month by a jury to pay $1.2 million to an investor who claimed that the firm committed stock fraud. [INVESTMENT NEWS: STOCK FRAUD]

JAN-28-08: KLA-Tencor has agreed to pay a $65 million in cash settlement to end a lawsuit alleging that the company and certain of its officers illegally backdated stock option grants. [CNN MONEY: STOCK OPTION SETTLEMENT]

FEB-28-07: Escalon Medical Corp. (Nasdaq: ESMC) has announced that it has entered into an agreement with IntraLase Corp. (Nasdaq: ILSE) to settle all outstanding disputes and litigation between the parties. [PR NEWSWIRE: STOCK FRAUD]

FEB-14-07: SEC announces $6.3 million settlement with former Take-Two Interactive Software, Inc. CEO in Stock Option backdating scheme. [MEDIA NEWSWIRE: SECURITIES SETTLEMENT]

FEB-01-07: California State Teachers' Retirement System has reached a settlement with Qwest Communications over a lawsuit accusing the company of defrauding the fund out of $150m. [FINANCIAL NEWS: SECURITIES SETTLEMENT]

FEB-01-07: Final approval given to $40.3 million securities settlement claims by mutual fund customers against Merrill Lynch & Co. over alleged conflicts of interest between its brokerage and underwriting businesses. [HERALD TRIBUNE: SECURITIES SETTLEMENT]

DEC-28-06: $5 million settlement has been proposed to settle the Amerigroup Corporation Securities Litigation class action. [PR NEWSWIRE: SECURITIES SETTLEMENT]

DEC-27-06: Nortel Networks has reached a legal settlement in two class-action cases brought in U.S. courts. The company will pay a total of $2.45 billion to shareholders. [TECH NEWS WORLD: NORTEL SECURITIES SETTLEMENT]

DEC-08-06: Bank of America Corp. and 38 other banks agree to pay $455 million to settle a lawsuit with investors in Adelphia Communications Corp., the bankrupt cable television company. [BLOOMBERG: SECURITIES SETTLEMENT]

NOV-29-06: FMF Capital Group securities class actions have been settled for over CAN$28 million, making it the largest securities settlement in Canadian history. [CNW: SECURITIES SETTLEMENT]

OCT-31-06: Krispy Kreme Doughnuts settles shareholder lawsuit for $75 million. [THE STREET: SECURITIES]

JUL-26-06: Banks agree to $99 million settlement regarding underwriting Global Crossings. [BANKNET 360: SECURITIES]

JUL-10-06: Nicor has reached a tentative $10 million settlement with the SEC regarding accounting practices. [CANADIAN BUSINESS: SECURITIES FRAUD]

JUL-07-06: Merill Lynch has agreed to pay $29.5 million to Enron for securities fraud. [BOSTON.COM: SECURITIES]

JUN-27-06: Raytheon to pay $12 million penalty to close SEC securities probe. [TRADING MARKETS: SECURITIES]

MAY-09-06: Harry Yuen to pay $22.3 million settlement for Gemstar-TV Guide International Inc. stock fraud scheme. [LOS ANGELES BUSINESS: SECURITIES FRAUD]


Register your Securities/Stock Fraud Complaint

If you have been a victim of securities fraud, you may send your complaint to a lawyer who will review your claim for free. Please click the link below.


Posted on Oct-20-05
Updated on May-1-08

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