Definition and Classification of Stock Market Frauds

Every stock market investor enters the stocks with the aim of making profits. However, many of them are not aware of the meaning of the stock markets.

Definition of Stock Market

Share Market is defined as the place where the owners of the company raise capital by selling the small percentage of ownership to the buyers. It is a place where the buying and selling of shares is done.

However, when brokers, dealers, insiders, traders trick them to buy shares at unreasonable price, it becomes a share market fraud. It is committed against investors. From Guaranteed income schemes to advance fee for high return scandals, investors are always lured by the cheaters. Opportunities that are too good to be true must pass the smell test.

How to Avoid Capital Market Frauds

How can these potential scams be avoided?

In the first place, it is necessary to take out time to perform independent research on any security you buy. If something seems like it is overly complex, rushed, or if important information seems to be omitted, there is likely a reason for this. Investors should follow one principle — if the opportunity is too good to be true then it is. Many ponzi schemes follow this principle.

To summarize, stock market fraudsters are evolving and to fight them effectively, it is necessary to be alert. Indiaforensic, covers many other stock trading frauds at length in its course CSMFA.

Similarly, Phishing, Bogus Chat room scams, identity thefts are evolving with the technology. Certified Stock Market Forensic Accountants (CSMFA) program covers wide array of share frauds coupled with stock market scams. CSMFA play a critical role in investigating growing frauds in capital markets.

Originally published at https://indiaforensic.com on May 10, 2019.