Issuing and trading in unregistered securities. A felony per the 1933 Act.
They are also representing these different, non-genuine securities as the genuine article. That's the fraud part.
I absolutely know is that Section 2 of the 33 Act has a list of definitions, and if you read the definition of a security, and of an issuer, you will find that the brokers issuing the things that they are trading that aren't genuine shares, are in fact meeting all the tests of issuing, and of issuing "securities". That they aren't accurately representing these different than the genuine article securities as different is the fraud aspect, but there is no question that those securities aren't the ones issued by the company, nor are they registered. Thus, trafficking and issuing unregistered, non-exempt securities.
