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If nobody is robbed in a securities fraud, what makes it fraud?


Risk.

Someone could take an underperforming investment to Vegas, happen to double the investment and return. However if they are using your money then you are taking more risk in that scenario than you’re expecting. Literally going to Vegas isn’t required, the same risk exists in many short term investments. Thus misrepresenting risk is considered fraud even if it happened to work out.




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