An Overview of Securities Fraud (Part 2)

September 9, 2013

Securities fraud costs investors in the U.S. between $10 and $40 billion each year, according to research conducted by the Federal Trade Commission and the FBI.

Securities fraud costs investors in the U.S. between $10 and $40 billion each year, according to research conducted by the Federal Trade Commission and the FBI.

As a continuation of An Overview of Securities Fraud (Part 1), the following provides some more information regarding securities fraud and how it can financially devastate investors. While Part 1 of this blog focused on defining what securities fraud is and discussing some specific types of securities fraud, here in Part 2, we will concentrate on highlighting the prevalence of securities fraud and how it can force some investors into filing for bankruptcy.

Prevalence and Cost of Securities Fraud

Securities fraud costs investors in the U.S. between $10 and $40 billion each year, according to research conducted by the Federal Trade Commission and the FBI (both agencies are responsible for investigating securities fraud cases). Additionally, according to the FBI, the number of securities fraud cases it is investigating and prosecuting has been steadily rising since 2005, with the greatest spike to date taking place in 2009 (following the subprime mortgage crisis).

While federal and state authorities are vigilant about tracking down and prosecuting those who commit securities fraud, unfortunately, recovering investors’ money can be far more difficult. This is due to the fact that those who commit securities fraud often devise ways of laundering and concealing invested monies, making it unlikely that defrauded investors ever receive any of their initial investments back. For those who invest a significant amount of money in such securities fraud schemes (like their savings and/or retirement funds), the results can be devastating and, in some cases, can force the defrauded investors to have to file for bankruptcy.

Colorado Bankruptcy Lawyers

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Categories: Bankruptcy, Blog, Financial Tips, Securities Fraud