The Securities and Exchange Commission uses anonymous bounty actions to regulate securities. More specifically, the SEC offers financial rewards to individuals who anonymously identify ETF market manipulations. These SEC ETF Bounty Actions encourage high end investors and financial professionals to anonymously expose illegal market manipulation schemes.
Illegal Sales of Stocks Can Be The Basis of SEC Bounty Actions
The SEC targets market manipulation schemes including illegal stock sales. These schemes can include international investors involved in market manipulation schemes as well as pump and dump schemes.
The SEC prohibits market manipulation and recently imposed a $35 million fine on investors who secretly dumped large quantities of microcap stock. This SEC action illustrates the agency’s determination to detect fraud and protect investors. More specifically, the SEC wants to make sure more exotic and complicated ETFs are not used to manipulate the markets.
Illegal Pump and Dump Schemes Can Also Be The Basis of SEC ETF Bounty Actions
The SEC also protects investors from illegal pump and dump market manipulation schemes. Further, the SEC prohibits the sale of millions of shares while a stock’s price is being artificially inflated and dumped into the market. This prohibition applies to different types of stocks including unregistered stocks and microcap stocks.
Further, the SEC works to root out overseas and domestic players who use microcap markets to take advantage of U.S. investors.
Evasion of Securities Registration Requirements Can Also Be The Basis of Bounty Actions
The SEC also regulates securities registration requirements. Further, the SEC targets those who violate the antifraud and registration provisions of the federal securities laws and who act as unregistered broker-dealers. They also target investors engaged in other manipulative conduct. This conduct includes disguising the true sellers of securities and defrauding investors to generate illicit profits.
SEC Bounty Actions Target Individuals and Entities Globally Who Seek to Defraud US Investors and Markets
The SEC pursues individuals and entities, whether located domestically or abroad, who undertake complex schemes to hide their fraudulent conduct.
Further, the agency uses anonymous bounty actions to encourage investors and financial professionals to expose these schemes. These anonymous bounty actions pay large financial rewards of 10% to 30% of recovered funds to whistleblowers.