Corporate Fiduciary Responsibility

Corporate or shareholder securities fraud occurs when a corporation intentionally hides or misrepresents information to its shareholders to create the appearance that the corporation is financially successful, when, in fact, the corporation is not so economically healthy. A corporation has a corporate fiduciary responsibility to its shareholders, i.e. to be upfront and honest regarding the corporation's true financial condition. If the corporation violates its fiduciary responsibility in this manner, its shareholders or investors may have legitimate claims for corporate securities fraud. This type of securities fraud may be confined to a few executives of the corporation, or may involve a larger number of corporate employees, depending on the circumstances. For instance, a corporate executive or director might alter financial records or hide discrepancies in income and spending in order to commit corporate securities fraud. Because of the large number of investors and investments potentially involved in a corporation, corporate securities fraud can be economically devastating for a corporation's investors and employees alike.

Fast Facts

  • The average length of a securities class action lawsuit reached 800 days in 2008.

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  • Corporate Fraud Laws & Regulations

    Stock fraud is a serious crime in the United States that comes with hefty penalties such as fines and possible...
    • Site: securitieslawfirms.com
  • Accounting Fraud

    Accounting fraud typically occurs in larger corporations across the country as a result of presenting false in...
    • Site: securitieslawfirms.com
  • Breach Of Fiduciary Duty

    A person that is legally tasked with managing the money of another individual is said to have “fiduciary dutie...
    • Site: securitieslawfirms.com
  • Securities Fraud Laws

    Securities fraud, also known as stock or investment fraud, consists of deceptive practices related to the offe...
    • Site: lawfirms.com
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