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Investor Fraud
Investor fraud generally involves a publicly traded company that has engaged in transactions and/or accounting practices that have the effect of artificially increasing or maintaining the stock price of the company's securities.
Buyers of the securities, who bought at the artificially inflated stock prices, lose money when the fraud is discovered and the company's true financial condition becomes known. Perhaps the most notorious case of investor fraud involved the accounting practices and artificial transactions of Enron.
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