Common Ways Corporations Cover Up Securities Fraud
When a corporation becomes aware that the SEC has opened up an investigation into its fraudulent activities, higher-ups will usually begin to find ways to hide or cover up the violation to protect themselves and, in some cases, to be able to continue the scheme for their own financial benefit.
Continue reading for more information about the ways corporate offices will attempt to disguise securities violations and cover up illegal activities.
Getting Rid of the Evidence
In financial markets, there is always documentation of the scheme, as swindlers need to be able to show something official to each potential investor—especially those who have more experience. The first step corporations may take is destroying these documents.
Investors who have experience in dealing with investment opportunities will have copies of any documents they signed, however, which can help the SEC enormously in its attempt to bring action against the corporation.
In an attempt to make it seem as though their activity is legitimate, corporations commonly cover up securities fraud by falsifying documents they provide to the SEC when they come under investigation. These documents usually suggest that the activity was legal and that investors were fully aware of the risks they were taking when investing in this particular opportunity.
It is also not unusual for corporate financial executives who become aware of fraudulent activity to close investigations of securities violations without reporting them to the SEC or internally and report them as a simple loss to the investor.
Connect with a Corporate Disclosure Whistleblower Lawyer
Corporations engaging in securities violations are often skilled in covering up fraudulent activity. If you’ve come across evidence that can demonstrate fraud or other violations within your company and you want to blow the whistle, get in touch with a corporate disclosure whistleblower lawyer at Meissner Associates today.
Give us a call at 1-866-764-3100 or fill out our secure contact form at the bottom of the page to get started.