Skip to Content

How to Report Securities Fraud

August 23, 2021 Blog

Securities fraud is a major concern for investors in the United States. From corporate disclosure violations to unregistered offerings and broker-dealer conflicts of interest, many types of securities fraud lead to substantial investor losses.

If you have information about securities fraud, or if you believe that you may be a victim of securities fraud, you should report it. If you qualify as a whistleblower, you may be eligible to receive a financial award from the U.S. Securities and Exchange Commission (SEC). If you are a victim of securities fraud, reporting the fraud may allow you to recover your investment losses. In any case, reporting the fraud will help ensure that the company, firm or individual is held accountable—and it will help protect other investors who might otherwise be at risk for suffering fraudulent investment losses.

3 Ways to Report Securities Fraud

There are three primary ways to report securities fraud in the U.S. Whichever option you choose, you will want to act promptly, as this will help increase the chances of the defrauding company, firm or individual being held accountable.

1. Report the Fraud to the SEC

The first option is to report the fraud to the SEC. The SEC is the federal agency that is responsible for overseeing the securities markets in the U.S. and enforcing the nation’s securities laws. It regularly investigates companies, firms and individuals suspected of defrauding investors, and it relies heavily on members of the public to come forward with information it can use to launch investigations.

In order to report securities fraud to the SEC, you must complete and submit the agency’s Tips, Complaints and Referrals (TCR) form. You can either print the form and mail (or fax) it to the SEC or use the agency’s online TCR system.

When reporting securities fraud to the SEC, “you are not required to furnish any more information than you wish or possess.” However, the SEC recommends that you minimally include the following:

  • Your name and contact information (unless you are submitting a tip anonymously);
  • The name and contact information of any individual or company you reference in your report;
  • A detailed description of the fraud (“including who was involved in the conduct and how, why and when the conduct occurred”); and, 
  • Copies of any relevant documentation you have in your possession.

If you have information about securities fraud of which the SEC is currently unaware, you may qualify as a whistleblower. Whistleblowers are entitled to certain protections, and they can also receive financial awards if they supply information that leads to successful enforcement action. In order to claim whistleblower status, you must answer “Yes” to the question, “Are you filing this tip under the SEC’s whistleblower program?” on the TCR form, and you must complete the Whistleblower Declaration at the end of the form as well.

2. Report the Fraud to Another State or Federal Agency

The second option is to report the fraud to another state or federal agency. The Employee Benefits Security Administration (EBSA), state attorney general’s offices, and local police departments all accept reports of securities fraud in appropriate cases. The EBSA handles complaints under the Employee Retirement Income Security Act (ERISA), state attorney general’s offices handle complaints under state securities laws, and local police departments handle certain cases involving embezzlement, theft and other crimes.

When reporting securities fraud to one of these agencies, it is a good idea to confirm that the agency will accept your report—as each one only handles limited types of cases. You should also make sure that you are providing all of the information required in order for the agency to evaluate your complaint and determine whether to initiate an investigation.  

3. Hire a Securities Fraud Lawyer to Help You Report the Fraud

The third option is to hire a securities fraud lawyer to help you report the fraud. You can do this at no cost. When you hire a lawyer, your lawyer will review your information and determine where it should be sent. Your lawyer can also report the fraud to the SEC or other appropriate agency on your behalf. If you wish to submit a whistleblower complaint to the SEC anonymously, you are required to hire an attorney and include your attorney’s contact information on your TCR form in order to be eligible for a financial award.

If you are a victim of securities fraud, a securities lawyer may also be able to pursue a claim for financial recovery on your behalf. Federal securities laws give investors the right to pursue fraud claims against companies, brokerage and advisory firms, and individual brokers and advisors. While some claims will need to be filed in federal district court, many securities fraud claims are eligible for FINRA arbitration.

When Can (and Should) You Report Securities Fraud?

As an investor or employee, it isn’t always (or even often) easy to tell if you have information about securities fraud. There are many different types of securities fraud, and each type has its own highly-specific definition under the law.

With that said, if you have concerns about possible securities fraud for any reason, you should speak up. There is a good chance that your concerns are valid; and, if they are, prompt legal action may be warranted. As a result, if you suspect any of the following, you should contact the SEC, another appropriate agency, or a securities fraud lawyer:  

  • Account churning (excessive trading
  • Accounting fraud
  • Breach of fiduciary duty
  • Broker or investment advisor fraud
  • Cryptocurrency or initial coin offering (ICO) fraud
  • Hedge fund fraud
  • Insider trading
  • Junk bond fraud
  • Market manipulation
  • Misleading or incomplete disclosures
  • Overconcentration (failure to diversity)
  • Unregistered securities offering

Contact a Securities Fraud Lawyer at Zamansky LLC

Zamansky LLC is a securities fraud law firm located in the heart of Wall Street. Our lawyers have decades of experience helping defrauded investors nationwide. If you have information or concerns and would like to speak with a securities fraud lawyer, you can call 212-742-1414 or contact us online for a free and confidential consultation.