The world of finance is a complex and often confusing place. It can be difficult to understand the inner workings of Wall Street and the stock market. While most people think of stockbrokers and investment bankers when they think of Wall Street crimes, the reality is that any person or company who trades in securities can be involved in criminal behavior.
In recent years, there have been a number of high-profile civil and criminal cases brought against financial institutions and individuals in the securities industry. In 2014, for example, JPMorgan Chase & Co. reached a record $13 billion settlement with the U.S. Department of Justice over allegations of mortgage fraud.
Some of the most common civil violations involve insider trading (which can be criminal), fraud, and market manipulation. Criminal charges are typically more serious and can include things like securities fraud, embezzlement, and money laundering. These days, with increased regulation and scrutiny from law enforcement, it's becoming increasingly difficult to get away with any type of wrongdoing on Wall Street.
Insider Trading is perhaps the most well-known of all Wall Street crimes. Illegal insider trading is when someone uses material, nonpublic information to buy or sell security while in possession of that information. This type of insider trading is a federal crime in the United States. The most common type is when corporate insiders - such as executives or board members - buy or sell shares of their own company's stock based on information they've received that isn't available to the public.
Other types of insider trading include passing along the information to friends or family members before it becomes public or buying or selling stocks in companies that are about to be acquired. Regardless of the type, all insider trading is illegal and can result in civil and criminal penalties. This is illegal because it gives the insider an unfair advantage over other investors.
Spoofing is another common practice on Wall Street that can be considered criminal. Spoofing occurs when a trader places an order for security with the intent of canceling it before the trade is executed. This practice is often used to manipulate prices and can be harmful to other investors. By placing a series of bids or offers that are aborted before reaching the market, a spoofer can buy or sell securities at artificially high or low prices.
The purpose of spoofing is to create a false impression of market demand in order to manipulate the price of a security. The spoofed orders do not result in any actual transactions but instead are used to deceive other traders into buying or selling at artificial prices. As a result, spoofing can lead to financial losses for innocent traders who believe that the prices they are seeing are real.
The white-collar crimes that occur on Wall Street are often complex and difficult to prosecute. However, the SEC is working hard to crack down on illegal behavior in the securities industry and protect investors. If you have been a victim of stock fraud or another type of Wall Street crime, it is important to speak with an experienced attorney who can help you get justice.