Securities fraud refers to illegal activities that deceive investors regarding the financial health or performance of a company. This can include misleading information about a company's earnings, insider trading, or manipulating stock prices. Such actions violate laws designed to protect investors and ensure fair trading practices in the securities market. Common forms of securities fraud include Ponzi schemes, where returns to earlier investors are paid using the capital from new investors, and pump and dump schemes, where false information inflates a stock's price before selling it off for profit. Regulatory bodies like the Securities and Exchange Commission (SEC) work to detect and prevent these fraudulent activities.