Securities and commodities fraud may be committed by investors, employees of brokerage houses, by corporate executives or their shareholders, or by other market participants. As with any fraud case, a misrepresentation is the essence of the crime. Working closely with the SEC, CFTC, and other state and federal regulatory entities, the FBI has placed a greater emphasis on the criminal investigation of securities law violators. The FBI has taken an aggressive role in both proactive and historical securities and commodities fraud investigations. FBI investigations have led to successful prosecutions involving penny stocks, national exchange stocks, commodities and futures markets, insider trading, and market manipulations, as well as unregistered securities cases.
Investors are able to research potential investments and invest over the Internet with ease.
Investors are electronically linked to a number of services that provide stock and commodity quotations, and critical financial information. Both the low cost of setting up a web page and the anonymity available, have made the Internet especially vulnerable to crime. The Internet has helped democratize the investment process by providing widespread access to the most specialized information, giving the appearance to thousands of investors of having an equal access to what was otherwise difficult to obtain data. Growth in the Internet Marketplace Internet users reached 61.4 million in the US in 1998 and will grow to 200 million by the year 2000. The number of web sites is doubling every 37 days.