Securities fraud

Securities fraud is when someone tells a lie or hides important information to trick people into investing their money in a bad company. It's like if someone told you they were going to give you a special toy if you gave them your candy, but then they never gave you the toy and kept your candy. This is bad because the people who invest their money lose all their money, and the person who tricked them gets to keep the money they stole.

Imagine if you went to a store and wanted to buy a toy, but the person selling the toy told you it was made by a famous toy company when it was really made by a cheap and unknown one. You might end up buying the toy thinking it was worth a lot of money, but later you find out it's not worth anything. This is how securities fraud works. A person may say something is really valuable when it's not, or they may leave out important information that would help you make a smarter decision about investing your money.

People who do securities fraud can be punished by going to jail or paying a big fine. So remember, it's important to always do your research before investing your money and make sure you're not being tricked by someone who's lying or hiding important facts.