Securities fraud includes deceptive practices involving various investments and can result in fines and prison time. Reporting options include contacting the SEC confidentially or filing a complaint with personal and company information. Whistleblower protection is available for employees who report fraud.
Securities fraud is an umbrella term that includes deceptive practices involving stocks, bonds, mutual funds, commodities and other investments. Some examples of securities fraud are falsifying company financial statements, falsifying Securities and Exchange Commission (SEC) records, insider trading, and manipulating stocks for personal benefit. Regardless of the specific type of fraud committed, securities fraud is a very serious charge. Not only can the SEC remove companies and individuals from any interaction with the markets, serious violators often receive a hefty fine and up to twenty-five years in prison. If you suspect securities fraud, you must report it to the SEC; however, you have a few different options on how to report this to them.
If you suspect that a form of securities fraud has been committed and would prefer not to have a formal complaint filed, call, email or tip the SEC. The SEC will want basic information from you, such as your name, address and phone number, and they will know why you suspect fraud. Upon receiving your information, they will confidentially investigate the accused in order to protect the falsely accused.
If you are certain of securities fraud or have been a victim of securities fraud, you can file a complaint with the SEC. Complaints include, but are not limited to, buying and selling issues with brokers, price manipulation, unregistered selling of securities, cold calling, problems with your financial planner, problems with retirement accounts, problems with an Initial Public Offering (IPO ) and marketing fraud. When filing a complaint, you must provide all of your personal contact information and information about the company or individual you have a complaint against.
In addition to contact information, the SEC will want to know the type of security, the security symbol, and the company or person that issued it. They also expect a personal statement that includes specific transactions and conversations and the names of all people who were contacted about the complaint. Likewise, your complaint will be investigated confidentially until all the facts are discovered.
For employees who have reported their employers for securities fraud and may be facing consequences such as dismissal, demotion, suspension or being threatened or harassed, there is a “Whistleblower” protection program. Whistleblower protection is carried out by the Occupational Safety and Health Administration (OSHA). You only have thirty days to file a complaint with OSHA and be protected. They will conduct detailed interviews and, if they find a basis for your complaint, will try to restore your employment, earnings and benefits.
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