Articles Posted in Pandemic

As 2021 draws to a close, it is a fitting time to revisit some of the main enforcement actions taken by the Securities and Exchange Commission (SEC) through fiscal year (FY) 2021, which ended on September 30th, 2021.

In total, the number of new enforcement actions filed by the SEC in FY 2021 increased by 7% over the previous year, with 434 new enforcement actions. While the total number of enforcement actions – including new actions along with other “follow-on” or open proceedings  – decreased slightly year over year in FY 2021, the SEC remained committed to its role as “cop on the beat for America’s securities laws,” as described by Chair Gary Gensler. [1] The SEC maintained a sharp focus on protecting the integrity of the country’s capital markets through enforcement actions against bad actors even in the face of the persisting COVID-19 pandemic persisted.

In announcing its progress on enforcement actions during FY 2021, the SEC concentrated on several key priority areas. Some of these priority areas, per a recent SEC Press Release, included “holding individuals accountable,” “ensuring gatekeepers live up to their obligations,” “rooting out misconduct in crypto,” “policing financial fraud and issuer disclosure,” “cracking down on insider trading and market manipulation,” and “swiftly acting to protect investors.” [1]

Stock fraud is awful, but it should not surprise you that it happens.  There are bad people out there who think nothing of stealing money from anyone they can.  Stock fraud, I bet, has been happening since corporations became a thing.

Stock fraud may occur when a company defrauds investors when convincing them to buy shares in their company.  The investment fraud may be a market manipulation scheme.  It may be an unethical brokerage firm forcing their brokers to sell the ‘stock of the day’ knowing full-well the stock is not worth a fraction of what the price the sell to you.

But, perhaps the worst form of stock fraud, to my mind, is the stock fraud that takes advantage of people’s fear about current events.  Understandably, potential investors or victims of fraud are today extremely concerned and frightened about catching Covid-19.  This is especially true for that frequent target of fraudsters, older people.  Not only is this segment of the population more vulnerable to Covid 19, but their fears are likely at a higher level.  This set of circumstances just creates a more fertile ground for investment fraud that takes advantage of loneliness and fear such as we have today with the pandemic.  So, it is vital to get the word out to older people and their children or caretakers to be especially vigilant about investment fraud phone calls.

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