What securities law governs identity theft?
For broker-dealers, funds and advisers, identity theft is reached by at least two areas of the federal securities laws. First, many identity theft schemes at securities firms fall within the prohibitions of the anti-fraud provisions, including Securities Act Section 17(a), Exchange Act Section 10(b), and Rule 10b-5 thereunder. Over the years the Commission has brought several identity theft-type cases under the anti-fraud provisions. For example, in the mid-1990s the Commission brought a case against an inmate in federal prison and several parolees.3 The inmate initiated the scheme by setting up two entities with names that were purposely designed to mislead investors into believing that the entities were affiliated with a well-known financial institution. One of the perpetrators (one who was not already in prison) even assumed the identity of an executive of the real institution. The schemers prepared various forms of false identification, letterhead, other materials, and conducted a
