Giving information about securities fraud, it can be stated that it is a type of white collar crime that refers to fraud committed in securities trading within a stock or investments. The main objective is to control the shareholders and make them decide wrongly with material that is also wrong and this mostly results in losses. This type of fraud is carried out by individuals such as stock brokers and corporate executives, and institutions particularly those in the capacity of brokerage firms and investment banks.

Types of Securities Fraud

There are several common types of securities fraud:

1. Insider Trading: The act of buying or selling a firm’s shares employing personal material not available to the rest of the market.
2. Ponzi Schemes: Offering new investors’ money to previous investors while having no other investors to sell a promising story to.
3. Pump and Dump: Sustaining fake reports that make the share price of a firm to rise so that one can sell the shares at the inflated price.
4. Churning: Engaging in active trading of a clients’ account with an aim of realize commissions.
5. Front Running: The practice of buying and selling at higher or lower prices than the transaction that one has prior information of, and intending to complete it at the same price.

Examples of Securities Fraud

Several high-profile cases below illustrate the impact of securities fraud:

1. Enron Scandal: The crisis of this company resulted from improper reportage of large loss making Enron’s management bankrupt and investors realized huge losses. So, the scandal revealed profound accounting irregularities. This led to negative consequences as it caused the company to go bankrupt and diminished people’s trust in corporations.
2. Bernie Madoff’s Ponzi Scheme: Bernie Madoff is a New York based con artist who was involved in running a Ponzi scheme, which involved def raiding investors $ 65 billion. There was still misrepresentation, where he made insane returns out of new investors’ emoluments. The scheme failed to work when there was no more money to put in; great losses plagued the financial world.
3. WorldCom Scandal: WorldCom company practiced accounting frauds thus failed in escalating the assets to more than $11 billion. This led it to declare bankruptcy and thereby endangering the investors’ capital. They all exposed serious pathological phenomena in the preparation of corporate reports.
4. Martha Stewart Insider Trading Case: Martha Stewart was involved in insider trading with manipulation information that had not been made public. She made the conscious decision to sell all the stocks she had in ImClone Systems before the stock began to decline. She was charged with insider trading and her case helped in explaining the legal repercussions of this vice.

Overall it is stated that securities fraud affects the efficiency of financial markets and investors with high risk. Thus, when familiarized with its types and examples, one will be able to identify such frauds in order not to be a victim. All unspecified areas have investigative, preventive, and punitive agencies such as the SEC to deal with securities fraud, which is unlawful.