Securities and Investment Fraud
Our philosophy is simple: Clients come first. Commitment to this principle has produced a twenty-year record of success.
Securities and Investment Fraud
Your broker or investment advisor is required to act in a responsible and ethical manner when managing your investments. You have the right to expect they will uphold these standards; far too often, however, the people who are entrusted to protect investments and retirement savings act in their own best interests while taking advantage of their clients.
Securities and investment fraud and misconduct can occur in a variety of forms. Some of the most common types are:
Unsuitable Investments
Financial professionals have a duty to recommend only investments that are suitable for each client’s particular needs, financial condition, and investment objectives. Investments can be unsuitable when they are too risky or costly for a client, or when they do not meet the client’s financial objectives.
Fraud or Misrepresentation
Financial professionals must be truthful when recommending investments to their clients. Fraud occurs when a broker or advisor misrepresents an investment to convince the client to invest. This can occur by providing false information, withholding information, or offering bad advice about the investment. Fraud is a serious offense that in some instances can rise to criminal conduct.
Elder Financial Abuse and Exploitation
Elder financial abuse is the illegal or improper use of an elderly person’s funds, property, or resources by someone in a position of trust, which includes financial professionals. Elder financial abuse often arises when one person emotionally manipulates another more vulnerable person and exerts undue influence over them. This type of exploitation can lead to significant financial loss and emotional distress for the victim.
Ponzi Schemes
All Ponzi schemes follow the same pattern: a “can't fail” investment is promoted (usually through word-of-mouth) with the promise of high returns and low risk. Sadly, there is no actual investment. Instead, new investors' money is used to pay the promised returns to earlier investors. The scheme falls apart when there is not enough new investor money brought in to sustain the earlier investors' promised returns.
Selling Away
Selling away occurs when a financial advisor sells securities or investments that are not approved for sale by their brokerage firm. Usually, this is done because the advisor is privately collecting large commissions for selling the unapproved securities. Typically, the reason these securities or investments are not approved is because they are too risky for most clients, a fact which is often not disclosed to the clients.
Lack of Diversification
Most reputable financial advisors understand that their clients' investments and retirement savings should be invested across a wide variety of investments to minimize the risk of loss. A lack of diversification occurs when the clients' savings are overconcentrated into one or just a few securities, exposing the clients to enormous risk of loss. Often, unscrupulous financial advisors will overconcentrate their clients' investments to maximize high front-end fees and commissions paid on the select investments. Overconcentration occurs frequently with suspect investments such as variable annuities.
Churning or Excessive Trading
This occurs when a financial advisor excessively buys and sells securities in the clients' accounts to generate commissions. Churning is not only illegal and unethical, but also extremely risky for clients and usually results in significant losses.
Unauthorized Trading
A financial advisor can only buy or sell securities and investments with the client's permission. According to the SEC, “Unauthorized transactions are trades that a broker makes for a customer without the customer's permission or authorization.” It is important to regularly review your account statements to determine if your financial advisor has engaged in unauthorized trading in your account.
For more than two decades we have successfully handled cases of securities and financial instrument fraud and negligence, broker-dealer negligence, retirement and investment loss claims, abusive tax shelters and breaches of contract. In addition to appearing in federal and state courts, we routinely represent clients in arbitration hearings before the Financial Industry Regulatory Authority (FINRA), the self-governing body of securities dealers.
If you believe that you have been the victim of securities fraud, negligence, or misconduct, we welcome the opportunity to meet with you to discuss how we may be able to help you recover your losses.
