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Investment Fraud Lawyer

If you have lost considerable funds through investing and you believe you were a victim of fraud, you may be entitled to full restitution. Reach out to a qualified investment fraud attorney to discuss the details of your case. 

Investing comes with a certain amount of risk, but these risks should never come from your financial planner, stockbroker, or brokerage firm. Ultimately, when these individuals and corporations fail to protect their investors from fraud, they can be held accountable through FINRA arbitration. The Financial Industry Regulatory Authority (FINRA) arbitrators have the ability to order them to reimburse you for your losses.

Following a significant investment loss, you may have no idea where to turn or what to do next, but a respected investment fraud lawyer at Wolper Law Firm could help. If we are able to take on your case, we’ll work diligently to ensure you are able to recover maximum compensation for your investment losses and hold the liable party to account for their negligence or misconduct. 

Common Types of Investment Fraud

Investment fraud can take many forms, but to describe it simply, investment fraud occurs when an investment opportunity is not what it seems to be. Some of the most commonly seen types of investment fraud include:

  • Misrepresentation – Stockbroker misrepresentation occurs when your financial advisor withholds material information or provided you with misleading information to impact your investment decision. 
  • Advance fee schemes – There are endless types of advance fee schemes. They promise large gifts, prizes, trips, and other things of high value in exchange for a smaller fee. The victim loses out when they don’t receive what they thought they were signing up for. 
  • Late day trading – This type of fraud involves executing trades after hours but then recording them as having been executed before the market closed that day. 
  • Cryptocurrency fraud – Cryptocurrency is unregulated by the government and a very popular way for scammers to trick investors into sending money, engage in money laundering, bribe people, and even avoid paying taxes.
  • Churning – Also commonly known as excessive trading, churning occurs when a broker over trades in an investor’s account with the purpose of generating commissions for themselves on each transaction.
  • Ponzi schemes – One of the most widely known types of investment fraud, Ponzi schemes lure investors in and then repay new investors with the funds of older investors. There is rarely any legitimate business activity with Ponzi schemes and they always fall apart when the scammer is unable to continue paying investor returns. 
  • Hedge fund fraud – Hedge funds are frequently risky, and there are many ways fraud can occur. Fraud in this arena generally involves misleading investors in order to get them to invest in the hedge fund. 
  • Embezzlement – Embezzlers steal or misappropriate funds that have been entrusted to them by the investor. 
  • Unauthorized trading – Brokers who execute trades without having obtained the permission of the investor to do so could have been engaging in unauthorized trading if the investor did not have a discretionary account. 
  • High-yield investment fraud – If it sounds too good it be true, it usually is. High-yield investment programs (HYIP) promise to generate high returns at low risk. This is a red flag that the HYIP is a scam.
  • Pyramid schemes – Pyramid schemes work by relying on recruits. The people bringing in new recruits are then paid with the funds brought on by the new recruits. These are very similar to many multi-level marketing schemes and will always fall apart when the fraudster is no longer able to generate enough new recruits to pay their investors.
  • Foreign currency fraud – Foreign currency fraud can include many types of schemes, but they all promise to produce high returns if trading is done in the foreign exchange markets. 
  • Unsuitable recommendations – Brokers should only recommend investment opportunities that align with the goals of the investor as outlined in their portfolio. Any investment that does not align with this goals may not be suitable for the investor. 
  • Social media and internet fraud – Any type of scheme using the internet can be considered internet fraud. Hiding money, embezzlement, and misrepresentation are some of the crimes that constitute internet fraud. 

These are just a handful of the various types of investment fraud you could have fallen victim to. If you have suffered losses due to any of the aforementioned types of investment fraud—or another scheme entirely—contact a qualified investment fraud lawyer to discuss your legal options. 

How to Know When You’ve Been a Victim of Investment Fraud

Probably the most common alert that you’ve been a victim of investment fraud is a sudden unexpected loss in your accounts. There are a couple of other signs you may have been a victim of fraud that can be seen in your accounts, including:

  • Trades you don’t recognize or understand
  • Unexpected gains or losses
  • An overall decline in your accounts over time
  • Excessive transactions
  • Losses in which other similar investments saw gains

At this point, you may have already been a victim of investment fraud and lost money. Although there may be a way for you to recover these losses in the future, it is important you are able to steer clear of investment fraud. Here are a couple of ways to tell whether an investment opportunity may be a scheme before you invest:

  • If it sounds too good to be true, it is.
  • You’re promised low risk with high returns.
  • You’re pressured to make a decision quickly.
  • The investment is unregistered.
  • The investment is complicated or doesn’t make sense.

Steps to Take to Recover Your Investment Fraud Losses

If you have been working with a financial planning institution, financial advisor, or broker, you might be wondering how you became a victim of investment fraud. The problem is advisors earn a living by making transactions in accounts that generate their commissions. 

So in many cases, a broker may not do their due diligence in researching an investment, or they may even knowingly engage in misconduct to further their own financial interests. When this happens, you can hold your broker accountable with FINRA. 

The FINRA Arbitration Process

You can initiate a FINRA arbitration complaint against your broker and the firm and seek full recovery of your investment losses. In arbitration, you will have the chance to present evidence to support your claims, including financial statements, witness statements, and other relevant materials. The respondent will then have the opportunity to defend themselves and present their own evidence. 

Once both parties have been heard, the arbitrator or arbitrators will deliberate and review the case in its entirety to determine whether investment fraud occurred and whether the respondent is liable for your losses. If they are, the arbitrators will also determine how much they should be ordered to repay you for what you’ve been through. 

From there, the defendant will be required to compensate you within thirty days of the decision being issued. This quick repayment period often makes FINRA arbitration a more attractive option when seeking financial restitution.

If you are unsure whether you want to move forward with a FINRA arbitration claim or consider your other legal options, you aren’t alone. Your stockbroker fraud lawyer will closely review your case to determine which path is most likely to produce a favorable outcome for you and your family.

Meet with a Investment Fraud Attorney

To learn more about how a respected investment fraud lawyer at Wolper Law Firm could help you recoup your investment losses, schedule a free, no-obligation consultation so we can further discuss the details of your case.

Our firm proudly offers these case reviews to wronged investors across the U.S. Take advantage of this opportunity and call our office at 866-814-6247 or submit the quick contact form we have included at the bottom of this page. 


Investment Fraud FAQ

Finding out you have been a victim of investment fraud can be devastating, and you likely have many questions about the process of recovering the money you lost and investment fraud itself.  Below we have provided answers to some of the most frequently asked questions regarding investment fraud and the FINRA arbitration process so you can gain piece of mind prior to your consultation.  If you have other questions that weren’t answered on this page and you have yet to schedule a complaint review, you can do so by reaching out to an experienced investment fraud lawyer.

How long do I have to file my FINRA arbitration complaint?

FINRA Rule 12206 sets the time-related eligibility requirements for FINRA arbitration claims. Investors have a maximum of six years from the date that the investment fraud occurred to initiate a FINRA arbitration complaint. It is important that investors keep a close eye on their accounts and contact an investment fraud lawyer when they notice inconsistencies.

What is a stock broker’s fiduciary duty?

Every registered stockbroker has a fiduciary duty to their clients. This means stockbrokers are obligated to prioritize the best interests of the investor over their own financial interests. When a broker fails to do so and instead engages in stockbroker misconduct or investment fraud, they have breached this fiduciary duty. Now, this only applies to registered financial planners  and brokers, which is why it is strongly encouraged you to work only with registered stockbrokers.

Do I have to go to FINRA arbitration to recover my losses?

No, FINRA arbitration is not the only way to recover your funds after losing money due to investment fraud. However, it is often the best way to go about getting your money back. FINRA arbitration decisions are not eligible for appeal, but the benefits often offset this risk. If you were to bring your case to court, not only are decisions appealable, but the entire process can drag on for many years. Even if the judge ultimately decides that you should be repaid, it can be many more years before you are compensated. With FINRA arbitration, the entire complaint process can be settled in as few as eighteen months.

Now is the time to talk to an investment loss recovery lawyer. We can help recover your investment loss. Free consultations, always.
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