What it is
This type of fraud encompasses a broad range of illegal activities, including misrepresenting material information about a company, insider trading, pump-and-dump schemes, and manipulating market prices. The intent is to deceive investors for financial gain, violating federal securities laws. Regulators like the SEC and DOJ actively pursue cases of securities fraud to protect investors and maintain fair and orderly markets.
In the crypto space, regulators often allege that unregistered crypto offerings or tokens meet the definition of "securities" and that their promoters engaged in securities fraud. This includes cases where initial coin offerings (ICOs) made misleading statements or where executives engaged in insider trading on crypto exchanges. News stories frequently detail enforcement actions against individuals or companies accused of defrauding investors through crypto-related schemes.
Why it matters
Securities fraud can lead to significant financial losses for retail investors who are misled by false information or manipulative schemes.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice