Securities fraud

Securities fraud is intentional deception connected with offering, purchasing, or selling financial securities. It includes schemes that mislead investors or manipulate securities markets.

Insider trading: Trading securities while violating a duty of trust by using material, nonpublic information. A specific securities offense involving concealed information and a breach of duty.
Security (finance): A tradable financial instrument, such as a share, bond, or investment contract. The instrument involved determines whether securities laws govern the alleged fraud.
Securities Act of 1933: A U.S. federal statute regulating public offerings of securities and requiring registration or an exemption. Its offering rules and antifraud provisions address deception when securities are issued.
Enron scandal: The collapse of Enron Corporation in 2001 after extensive accounting deception and concealed liabilities. The scandal illustrates how false reporting can mislead securities investors and auditors.
Insider Trading Sanctions Act of 1984: A U.S. law that increased civil penalties for insider trading and related violations. It exemplifies legislative efforts to strengthen deterrence for a major securities offense.
Market manipulation: Conduct intended to create artificial prices or trading activity in a financial market. Manipulated prices can mislead investors even when statements about a company are accurate.
Materiality (law): The legal significance of a fact that could matter to a reasonable person's decision. Materiality helps distinguish actionable omissions and misstatements from immaterial inaccuracies.
Securities Exchange Act of 1934: A U.S. federal statute regulating securities trading, exchanges, and public-company reporting. It provides key federal rules against fraud in secondary-market transactions.
WorldCom scandal: A corporate accounting scandal in which WorldCom improperly reported expenses as capital investments. Its misstated financial results concealed the company's deteriorating performance from investors.
Sarbanes–Oxley Act: A U.S. law enacted in 2002 to strengthen corporate reporting, auditing, and accountability. Corporate scandals helped spur controls intended to reduce deceptive financial reporting.

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