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The securities laws and the Commodity Exchange Act prohibit the use of fraud or deceit including obtaining money or property through material misstatements and omissions in the offer or sale of securities. Misrepresentations that lead to significant actual or potential investor harm are frequent targets of enforcement actions by the SEC and CFTC and can be the basis for whistleblower claims.
The government is concerned about deception of investors in both public and non-public (pre-IPO or private) companies and transactions. Sophisticated investors and market participants can be the victims of misrepresentations as much as retail investors can be.
Investors can be misled by any number of ways, including: