The aim of this paper is to determine how accusations of financial fraud affect the stock prices of companies, both in the short and long term. The analysis focuses on market reactions immediately after the accusations are made public and over a three-year period. The study also compares changes in the stock prices of affected companies with relevant market indices to investigate broader market trends. The research included a sample of 21 companies accused of financial fraud. Data on stock price movements and market indices were collected using Bloomberg Terminal and S&P Capital IQ platforms. Quantitative analysis of changes in stock prices and indices was conducted across different time intervals, from the first day to three years after the accusations. A Student’s t-test and Wilcoxon signed-rank test was applied to verify the statistical significance of stock price changes. In the short term, the accused companies' stocks experienced a significant decline of -10.53% on average on the first day after the accusations, while the market indices remained relatively stable -0.66%. In the mid-term, within the first year, these companies' stocks further declined by -44.47%, while market indices continued to rise. In the long term, after three years, the stocks of all companies in the sample recorded an average decline of -74.69%, while the indices showed a growth of 37.71%. The correlation between the stock prices of the accused companies and market indices decreased over time, almost disappearing in the long term. Financial fraud have a significant negative impact on stock prices, as confirmed in all observed periods. Market indices demonstrate resilience and growth over time, while the affected companies lose investor confidence and show a long-term decline in stock prices. The research results confirm the alternative hypothesis that financial fraud cause a significant decline in stock prices over time.