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Investment and Securities Fraud

When you get involved with the stock market or other investment avenues, your goal is of course to make money – but you have to be prepared to lose some of it. Even less risky investments don’t always pay off. However, in some instances, losses may not have anything to do with the volatility of the market or the performance of a company. They could stem from financial advisor or broker fraud.

What is investment and securities fraud?

Unfortunately, there are a number of different ways for a financial services professional to commit fraud. These could involve misrepresentation, omission of material facts, non-disclosure, or deception when trying to sell a security. Fraud may also be alleged for other actions, such as churning, breach of fiduciary duty, selling away, or unsuitable investment advice.

Who is at risk for becoming a victim of fraud?

Anyone who entrusts their money with a broker or other financial professional can potentially become a fraud victim. However, there are certain types of people – including older investors – who can be more susceptible to fraud.

How to spot fraud

Although some unscrupulous brokers come up with new ways to cheat people out of their money, here are some tactics that are frequently used and should be a big red flag:

  • Unsolicited contact by phone or email
  • Pressure to buy from a broker or advisor
  • No prospectus on an investment
  • A claim of guaranteed interest
  • An advisor doesn’t have credentials or valid licenses
  • An investment is hard to understand

Common fraud scams

In addition to bogus investments, sometimes fraud is much more elaborate. This could include Ponzi or pyramid schemes, “pump and dump” penny stocks that wind up worthless, or “too-good-to-be-true” deals involving pensions, startup companies, offshore operations, self-directed IRAs, or precious metals.

What can you do if money was lost as the result of fraud?

Often when someone realizes that they have been taken advantage of, they don’t take action. This could be because they’re embarrassed or they just don’t think something can be done. Fortunately, victims of fraud do have recourse. Often, money can be recovered through securities arbitration or litigation. To find out if this is an option for you, get in touch with the Silver Law Group. We may be able to help you recover lost money due to fraudulent financial advice, and because we work on contingency, you won’t owe us a fee unless we’re successful. You can contact us through our online form or call 1-800-975-4345.

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