SEC
Whistleblower
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Securities Laws

Common Securities Violations

Corporate Disclosures & Financials

Corporate disclosures and financial violations often relate to false or misleading financial statements that have been filed with the SEC in either a company’s registration statement, prospectus, or as part of any other of the company’s required filings under the Exchange Act.

Failures to make required filings would also fall under this category. This type of fraud often occurs when a company uses accounting tricks to increase the reported earnings and revenues for a particular reporting period.

Another common scenario is when companies engage in manipulative business transactions that have the effect of altering revenues, expenses, earnings, and/or losses for a reporting period. Sometimes these transactions might even be legal, but they are used unlawfully.

A violation under this category could also occur when a company fails to speak truthfully when discussing its financial results e.g., in press releases or analyst or investor presentations. Additional examples include undisclosed conflicts of interest, corporate governance/legal matters, or revenue impact of one-time events.

In recent years, on average, 17.3% of all SEC whistleblower tips have involved this type of securities violation.

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