Enforcement Tips and Complaints
If you would like to provide us information about fraud or wrongdoing involving potential violations of the securities laws, which may include the conduct listed below, use the Tips, Complaints and Referrals Portal. See also further information about submitting a tip or complaint.
- Ponzi scheme A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity., Pyramid SchemeIn the classic "pyramid" scheme, participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same., or a High-Yield Investment ProgramIf someone approaches you about investing in a so-called "prime bank" program, "prime World Bank" financial instrument, or similar sounding high-yield security, you should know that these investments do not exist. They are all scams. For more information about these bogus programs, visit the Division of Enforcement's Prime Bank Fraud Information Center.
- Theft or misappropriation of funds or securities
- ManipulationManipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security. Manipulation can involve a number of techniques to affect the supply of, or demand for, a stock. They include: spreading false or misleading information about a company; improperly limiting the number of publicly-available shares; or rigging quotes, prices or trades to create a false or deceptive picture of the demand for a security. Those who engage in manipulation are subject to various civil and criminal sanctions. of a security's price or volume
- Insider tradingInsider trading is a term that most investors have heard and usually associate with illegal conduct. But the term actually includes both legal and illegal conduct. The legal version is when corporate insiders-officers, directors, and employees-buy and sell stock in their own companies. When corporate insiders trade in their own securities, they must report their trades to the SEC.
Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information.
- Fraudulent or unregistered securitiesThe SEC requires companies to disclose important financial information through the registration of securities. In general, all securities offered in the U.S. must be registered with the SEC or qualify for an exemption from registration. Registration forms call for descriptions of a company's business operations, its management and the securities it is offering; audited financial statements must also be included. Registration statements and prospectuses become public shortly after the company files them with the SEC, and may then be viewed electronically using EDGAR. Intrastate, and smaller offerings, as well as private offerings to a limited number of offerees, and certain offerings of municipal, state or federal government securities may qualify for exemption from registration. offering
- False or misleading statements about a company (including false or misleading SEC reports or financial statements)
- Abusive naked short sellingShort selling is generally defined as the sale of securities that an investor does not own or has borrowed. In a "naked" short sale, the seller does not borrow or arrange to borrow the securities in time to make delivery to the buyer. As a result, the seller fails to deliver securities to the buyer when delivery is due (known as a "failure to deliver" or "fail").
- Bribery of, or improper payments to, foreign officials
- Fraudulent conduct associated with municipal securitiesMunicipal bonds are debt securities that states, cities, counties, and other governmental entities issue to raise money for public purposes-such as building schools, highways, hospitals, sewer systems, and other special projects. When you purchase a municipal bond, you lend money to the "issuer," the government entity that issued the bond. In exchange, the government entity promises to pay you a specified amount of interest, usually semiannually, and return your money, also known as "principal," on a specified maturity date. transactions or public pension plans
- Other fraudulent conduct
If you submit your information online through the SEC's Tips, Complaints and Referrals Portal, and would like to (1) be eligible to apply for a whistleblower award and/or (2) receive additional confidentiality protections (even if you do not wish to be considered for an award), you must answer "yes" to the question "Are you submitting this tip, complaint or referral pursuant to the SEC's whistleblower program?" on the "About You" page of the online questionnaire. You must also complete the whistleblower declaration at the end of the questionnaire.
The SEC treats all tips, complaints and referrals as confidential and nonpublic, and does not disclose such information to third parties, except in limited circumstances authorized by statute, rule, or other provisions of law. As a matter of practice, the whistleblower program provides additional confidentiality protections, consistent with the limitations on disclosure of information that could reasonably be expected to reveal the identity of a whistleblower set forth in Section 21F(h)(2) of the Securities Exchange Act of 1934 [15 U.S.C. § 78u-6(h)(2)] and Rule 21F-7 of the SEC's Whistleblower Rules [17 C.F.R. § 240.21F-7]. You should answer "yes" to the whistleblower program question if you wish to avail yourself of these additional confidentiality protections, even if you are not interested in being eligible for a whistleblower award.
Please be aware that these additional confidentiality protections may in some cases limit or delay the SEC's ability to disclose your identity to certain other agencies, regulators or other third parties. For that reason, we suggest you check "no" if you are submitting your information in order to seek our assistance to resolve an issue with your broker or other financial professional, such as the processing of a trade or a question about your statement. We likely will need to share your information in order to assist you. In addition, if you do not wish to be considered for an award and you intend for us to coordinate with another government agency or regulator, checking "no" may help facilitate this process.
Please note that if you choose to submit your information anonymously under the whistleblower program, i.e., without providing your identity or contact information, and you wish to be eligible for a whistleblower award, you must be represented by, and provide contact information for, an attorney in connection with your submission.