Types of Securities Fraud and Related Information

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Types of Securities Fraud and Related Information

When a broker influence many customers stock trading or other trading like securities without any concerns of them is called securities fraud. Stock fraud can be managed by any of single employee of the respective concern. Securities fraud can be occurred in different size of financial activities in billion dollar deals.

Here are some examples of securities fraud by broker:

Churning – a form of securities fraud called churning is used In order to create additional broker’s fees. But this Churning depend upon huge numbers of transactions. This type of frauds can be generates by the broker. It is one type of tricks and its occurs when the no of activities can be increased by such activities like buy and selling many different stocks so as to generates loud fees.

Unsuitability – Security or stock fraud involving unsuitability appear when a broker recommends such stocks to the client as risk free. But at the end it could be seen as huge losses and the losses are much higher than such limits – that a client can bear.

Over concentration – It is a form of stock fraud and it occurs when broker fails to modify the client’s portfolio. To protect the client’s asset, the respective broker should have to vary the types securities purchased through exchange.

Misrepresentation – This type of stock fraud happens when the broker internationally misguide the customer about the material related facts regarding security.

More exact form of securities fraud may take place at the executive level. But in some particular situation or cases, stock is essentially company policy. Where several employee taking part in committing or concealing illegal practices. If stock fraud occurs in large levels in such companies, therefore it could be destroy the entire company by misguide or influence the stock values.

At that type of fraud cases, who will help you out? Yes! You can take helps from Stock Fraud Attorney and Securities Fraud Attorney as well. You need to have good discussion with them to escape from the situation.

All forms of stock and securities fraud are designed to violate the investor/broker trust. The main fundamental of stock fraud is that the investor’s Interests are secondary to the financial gain the broker can make. Stock fraud can destroy individuals and business simply by influencing the stock market as well.


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