Criminal Law:

Securities Fraud

Securities fraud is committed when

  • 1) a corporate officer or director makes a material misrepresentation, withholding, or distortion related to stock information, in most cases pertaining to value
  • 2) an officer or director unlawfully discloses confidential information related to a stock
  • 3) an individual or entity acts upon the unlawful disclosure of certain confidential stock information.

Securities fraud is usually governed by both federal and state law, and legal action can be initiated by private investors, or by a government agency such as the U.S. Securities and Exchange Commission (SEC).