Private investors that are guilty of securities fraud are most often inside traders, which means that they acted on privileged information to profit and cause a loss to other stockholders or investors in a given investment.

Individuals or corporations guilty of securities fraud can be charged legally in addition to the civil lawsuits by individual investors or groups of investors. They are known as "white collar crimes" and are often very difficult to prosecute due to the complexity of the deception in the schemes.

There are two groups, the Securities and Exchange Commission (SEC) and National Association of Securities Dealers (NASD) that monitor and oversee investments and do investigate and prosecute security fraud cases.