Investing in the stock market can be a lucrative endeavor, but savvy investors know that it comes with risks. One such risk is the possibility of securities fraud by malicious individuals.
When fraudsters engage in deceptive practices to mislead investors, you might suffer financial losses due to this wrongful and unlawful behavior. When fraudulent activities affect a multitude of investors, a class action lawsuit may be worth pursuing.
Material misrepresentation
Securities fraud often involves making false statements or omitting information that could impact investment decisions. For example, a company might provide misleading information about its financial health or future plans. This can cause harm to investors who rely on accurate details to make informed choices.
Market manipulation
Market manipulation is another red flag for potential securities fraud. This occurs when individuals or entities intentionally interfere with the normal operation of the market. This can include spreading false rumors or artificially manipulating stock prices.
Insider trading
Insider trading occurs when individuals use confidential information not available to the public to gain an unfair advantage in the stock market. When company executives or employees, exploit their position for personal gain, it can harm other investors.
Accounting fraud
Accounting fraud refers to the act of manipulating financial records to present a false image of a company’s financial health. A deceptive business leader might inflate revenues or hide liabilities to attract new investments.
There were 205 new federal securities class action suits filed in 2022. These types of cases are more common than one might think, illustrating the fact that affected parties should not hesitate to pursue legal action if securities fraud comes to light.
