J. Patrick Quillian, P.C.

J. Patrick Quillian
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AN overview of securities fraud and types

The term white-collar crime means nonviolent financial crimes committed for pecuniary gain. The term derives from the type of people more likely to get charged with these crimes, which are people in business sectors. There are several types of white-collar crime in Oklahoma, but securities crime is common and covers several types.

Securities and securities fraud overview

In finance, securities include tools with a certain value they can get traded, bought, or sold, such as stocks and bonds. Securities divide into three categories: equity, derivatives, and debt. Debt securities are commonly fixed-income investments that include bonds. Equity refers to shares or stock a person buys in a company and derivatives includes options.

Securities fraud occurs when a person willfully uses fraudulent ways to profit from a security asset. This commonly includes misrepresenting, lying, omitting important information, or stealing money from investors. While white-collar crimes don’t have a certain face, people are more likely to commit securities fraud if they have access to payroll so they can manipulate books.

Types of securities fraud

A common securities fraud scam involves using information not accessible to the public for insider stock trading. Some forms of insider trading is legal, such as an employee buying company stock, but they must be registered with the Securities and Exchange Commission.

Internet fraud involves attempting to lure potential investors with hyped emails and websites. This could include attempting ID theft or giving fake stock tips. The scammer may also create a fake stock or bond for profit and then disappears.

A Ponzi scheme promises investors a high return for a small investment. The scheme commonly doesn’t include a tangible product and scammers pay investors with the money from new recruits. The Ponzi scheme needs a steady flow of investors to keep it from falling.

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