Fraudulent Trading Law and Legal Definition

The carrying on a business for a fraudulent purpose amounts to fraudulent trading. For example, accepting advance payment without the intention of supplying goods.

Pursuant to 15 USCS § 78n, fraudulent trading in connection with a tender offer means an “untrue statement of material fact or omission of fact with respect to tender offer. It shall be unlawful for any person to make any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading or to engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer or request or invitation for tenders, or any solicitation of security holders in opposition to or in favor of any such offer, request, or invitation”.