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Abstract

Legal scholars have expended considerable energy on the study of high-level securities fraud violators-Ken Lay, Bernie Ebbers, Dennis Kozlowski, etc. There has been little attention, however, to the perpetrators of "retail" securities fraud-the con artists who sell bogus stock over the Internet, orchestrate elaborate pump-and-dump schemes, and create a never-ending array of purportedly "risk free" investment opportunities. Collectively, and in a cruel mockery of capitalism, these offenders extract hundreds of millions dollars from investors each year. In this article, Professor Barnard examines this group of offenders, focusing particularly on those who recidivate-often moving from state to state and scheme to scheme, with little interruption from the law enforcement community. She hypothesizes that offenders in this group, much like sex offenders, may be "hard wired" to engage in fraudulent behavior. Even if that is not the case, however, these offenders present a much greater risk to the public than the current SEC enforcement regime contemplates. She proposes a series of new enforcement strategies to deal with this predatory population.

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