Securities fraud is an all encompassing 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) filings, insider trading, and manipulating stocks to gain personal benefit. Regardless of the specific type of fraud committed, securities fraud is a very serious charge. Not only can the SEC strip companies and persons from any interaction with the markets, but serious offenders most often are given 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 couple different options on how you report it to them.
If you suspect a form of securities fraud has been committed and prefer not to have a formal complaint on file, you may call in, email, or mail a tip to the SEC. The SEC will want basic information from you such as name, address and telephone number, and they will want to 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 you have been a victim of securities fraud, you can fill a complaint with the SEC. Complaints include, but are not limited to, buying and selling issues with brokers, price manipulation, unregistered sale 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 give all your personal contact information and information about the firm 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 firm or person that issued the security. They also expect a personal statement that includes specific transactions and conversations and the names of all the people that have been contacted about the complaint. Similarly, your complaint will be confidentially investigated until all the facts are discovered.
For employees that have reported their employers for securities fraud and may be suffering consequences such as discharge, demotion, suspension or getting threatened or harassed, a “Whistleblower” protection program exists. Whistleblower protection is handled by the Occupational Safety & Health Administration (OSHA). You only have thirty days to file a complaint with OSHA and be protected. They will conduct in-depth interviews and if they find a basis for your complaint, will try to get your job, earnings and benefits restored to you.