Securities Fraud

Securities Fraud

Securities Fraud

Securities fraud is largely regulated via the Securities Exchange Act of 1934 and the Securities Act of 1933. There are two forms of securities violation namely:  insider trading and material omissions or misinterpretations or both (Heenan et al., 2010).  Both the 1993 Act and1994 Act focus on different markets. The 1993 Act regulates the primary market and the 1934 Act regulates the secondary market. These two Acts however have a common objective of ensuring that vigorous market competition by mandating full and fair disclosure of all material information in the marketplace.

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The internet has led to an increase in securities fraud with people buying and selling securities online. Those seeking to carry out fraudulent acts use spam emails to send fraud messages to possible investors. The back dating of executive options has also dominated it recently. The extent to which buyers depend on analysts’ information is also another major concern in securities fraud.

References
Heenan, P.T., Klarfeld, L.J., Roussis, M.A., Wash J.K. (2010). Securities fraud. American Criminal Review

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