Fraud and negligence in the financial industry are increasingly common and, unfortunately, cause impressive economic losses ascending to billions of dollars.
However, investors who have experienced losses and believe it was caused due to a poor investment advice or fraudulent behavior have options for getting their money back with the help of a securities lawyer.
Why Choose Us
If you have experienced investment losses caused by a poor investment advice or fraudulent behavior, the Wolper Law Firm can help. Our investor fraud attorneys are tenacious and knowledgeable. In addition, we stand out for:
- Having a 99% recovery rate for investors
- Impressive results for many of our clients, including a $10 million settlement against a national brokerage firm in a securities fraud dispute and a $1.25 million recovery against a national brokerage firm in a dispute involving failure to supervise and theft
- Pursue claims across the U.S. in all forums, including arbitration before the American Arbitration Association (AAA), Financial Industry Regulation Authority (FINRA), JAMS, and state and federal courts.
The Wolper Law Firm is headed by Matthew Wolper. Mr. Wolper was a partner at a national law firm, where he spent the first fourteen years of his career representing large brokerage firms and Wall Street banks in securities matters. These rich experiences, coupled with his unrivaled work ethic, focus, and trial readiness, make Mr. Wolper a great fit for aggrieved investors.
Mr. Wolper has handled a wide range of cases involving complex financial strategies and products, including:
- Closed and open-end mutual funds
- Traditional stocks
- Margin and other securities-based lending products
- Hedge funds
- Structured products
- Penny stocks.
Mr. Louviere spent the first 10 years of his career representing the world’s most prominent broker-dealers and their registered representatives. He is now a seasoned litigator who focuses on securities arbitration and litigation. Mr. Louviere has litigated hundreds of insurance- and securities-related matters in federal and state courts and arbitration forums.
Read our testimonials to learn more about how we’ve helped investors.
Below we will look at some of the most common types of fraud and negligence and what our investor fraud attorneys can do for you if you find yourself involved in any of these situations.
Fraud or Misrepresentation
Securities Fraud
Securities fraud generally involves withholding or misrepresenting facts necessary to make an informed decision about investing in a security. Your financial adviser is legally required to fully explain the risks of any investment, adequately disclose the fees and commissions associated with it, and always put your interests ahead of their own. On this, the law is very clear.
Securities fraud encompasses a wide range of misconduct, including:
- Foreign currency funds
- Advanced fee schemes
- High-yield investment fraud
- Pyramid schemes
- Ponzi schemes
- Late-day trading
- Hedge fund-related fraud.
If you believe you may be the victim of securities fraud, read on to learn how to spot the warning signs.
Breach of Fiduciary Duty
A fiduciary acts on behalf of another to manage assets and finances. Common examples include financial advisers or brokers. Due diligence is required to ensure investors are fully informed about a potential purchase. This involves a comprehensive check of a potential investment’s financial and operational status.
Fiduciary duty requires that brokers always act in the best interests of their clients. Specifically, the law holds financial advisers to specific disclosure standards, due diligence, and consideration of their clients’ needs.
While any portfolio can suffer losses, a sudden and steep loss can indicate a breach of fiduciary duty. Here are some scenarios where this can happen:
Unsuitable Investments
Financial advisers have a duty to recommend only suitable investments. The standard for suitability requires the recommended securities to be properly vetted, not excessive in amount, and appropriate to the individual investor.
Before making recommendations to you as an investor, a financial adviser must have a complete picture of your investment profile — that is, your needs, goals, and risk tolerance. They must provide guidance they believe to be appropriate and disclose all risks so that you can make a fully informed decision. Note, however, that suitability claims are common in investment recovery cases but require experience and care to handle properly.
Unauthorized Trading
You must authorize every trade your financial adviser makes on your behalf. Even in cases where you may have given your adviser leeway and discretion, they must ensure you are aware of and authorize all trades.
Unfortunately, generous investment commissions may tempt advisers to take advantage of clients for their own benefit. As a result, clients who take a passive approach may become victims of unauthorized trading. If this has happened to you, hire an experienced securities lawyer to recover commissions and losses imposed by unauthorized trading.
Lack of Diversification
Diversification is the cornerstone of safe investing. When investing your life savings, you need security from diversification across asset classes, market sectors, and geopolitical arenas.
Your trusted advisers must consider this when discussing and handling your investments. Failure to diversify can result from an inexperienced, overconfident broker or adviser who is trying to beat the market or make a big win for their client. They might also fail to apply proper oversight and due diligence. A lack of diversification can mean steep losses or missing out on valuable gains. It can spell the difference between security and uncertainty.
Churning
Churning refers to a financial adviser’s trading securities to generate fees or commissions — in other words, putting their own interests ahead of yours.
One typical example is selling one security and purchasing another similar security soon after. Your market exposure remains unchanged, but you incur trading fees, and perhaps the adviser earns commissions. Churning can be subtle; we know how to perform the detailed analysis required to build a strong case.
Failure to Supervise
The responsible stewardship of your savings is the responsibility of your financial adviser and their employing broker. Brokerage firms must maintain a reasonable system of supervising all employees to ensure adherence to laws and standards. Inappropriate and illegal behavior on the part of advisers indicates a failure of this supervisory system and may form the basis for a cause of action.
Selling Away
Financial advisers are only permitted to sell securities approved by their brokerage firm. Selling anything else is strictly prohibited. This is for the safety of the investor; only those securities which have undergone a thorough vetting process by a brokerage are appropriate for financial advisers to sell.
The other reason for the rule is to prevent conflicts of interest. An adviser might be tempted to persuade clients to invest in businesses in which the adviser holds an interest. Even if the adviser receives no compensation for doing so, this will still constitute illegal selling away.
It is always better to clear any doubts. If you feel that you have been or are being affected by your financial adviser’s misdeeds, contact us to evaluate your case and find the best alternative for your benefit.
Frequently Asked Questions
Securities law can be challenging to understand. Here are some frequently asked questions from our clients:
A securities class action is a legal action brought for a group of investors who have suffered the same type of monetary loss in a particular security or stock due to fraudulent stock manipulation and other violations of state and federal securities law.
No, you do not have to join the class action. Every investor has the right to opt out of a securities class action. You may want to opt out of the class action if you:
- Believe you have a stronger claim and can get more damages
- Have unique circumstances that set your claim apart from the rest of the class
- Want to settle on your terms. If you join the class action, you will be bound to the class action settlement terms.
A Lead Plaintiff is a representative party or person appointed by the court who represents and acts on behalf of the other class members in the lawsuit. The court typically appoints the person or party with the largest financial interest in the case as the Lead Plaintiff. Some cases may require the court to appoint co-lead plaintiffs.
The types of damages you can expect from a securities action depend on the facts of your case. However, securities cases that are not dismissed for legal reasons at the beginning typically settle. Settlements usually consist of payments of stock, cash, or a mix of both to a common fund that will be divided among the class. Each class member will receive the amount the court has determined they have lost.
In rare cases, you may get the maximum possible recovery, which is the amount of loss caused by illegal conduct minus attorneys’ costs and fees.
Typically, no. Most securities law firms, including the Wolper Law Firm, litigate securities fraud cases on a contingent fee basis. As such, you and the rest of the class don’t pay court costs or attorney’s fees unless there is a recovery.
Losing money due to poor financial advice and fraud can be frustrating. Fortunately, an experienced securities lawyer can help you recover your losses. Contact the Wolper Law Firm today at 855.291.2720 or fill out this online form to learn more. A Wolper Law Firm securities lawyer will contact you with further discussions and details.
Attorney Matthew Wolper
Matt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks.
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