The federal Securities and Exchange Commission (SEC) has been the agency in charge of enforcing securities and finance laws on the various securities exchanges and over-the-counter (OTC) marketplaces. For years, there have been some markets that were not heavily regulated or overseen, as it was believed that these markets would be able to be self-regulating and self-policing.
But then the 2008 financial crash happened. And as one would expect, the federal government decided to get even more involved in the securities markets, introducing a whole new set of regulations and rules to clamp down on some of these speculative markets that were blamed for the crisis.
One of the culprit markets was the “exotic” mortgage-backed securities market, and another was the market called the illiquid bond market. These two markets were relatively new at the time of the financial crash, but were increasingly popular among investors because of their relatively little regulation and oversight by federal authorities.
The belief was these markets were so high-risk that they would take care of themselves. However, as federal regulators started creeping further into these markets, they have found that these markets have been corrupted by some people playing a bit fast and loose with the rules that were in place. One such of these cases is being prosecuted by federal authorities with charges of providing fake or false price quotes on several illiquid debt products.
These markets, though not heavily regulated until the last few years, begat extremely complex fraud cases for federal prosecutors, but are cases that the SEC and federal attorneys are pursuing with more aggression and vigor than at any time before.
These cases are in fact so complex and nuanced, that something that is actually above-board could be under scrutiny as regulators become more assertive in their enforcement. When regulators get more assertive, it begs investment clients to ensure that their rights to participate in the market are defended. This means making sure that investors have a good financial attorney available for advice about financial market regulations and rules to make sure they don’t get caught up in a fraudulent or deceptive activity.
Now that regulators are more active, it would be regular to make sure investors have an ally to fend off the scrutiny on legitimate business.