Securities Fraud Attorney
Don’t Stay Silent If You’ve Been the Victim of Financial Misconduct
Our Securities Fraud Attorney Helps Aggrieved Investors Recover Their Money
When you place your hard-earned money into the hands of a stockbroker, financial advisor, or other money manager, you expect that person to be an honest professional you can trust to treat your investment as safely and carefully as if it was their own money. However, that doesn’t always happen, and you may need a securities fraud attorney to step in and help. Sometimes brokers, advisors and their brokerage firms make mistakes, are negligent or intentionally commit securities fraud. When they do, real people who have counted on their investments to safeguard their futures suffer.
Financial advisors and brokers have a fiduciary duty to give good, honest investment advice to their clients. If they negligently or intentionally breach that duty by committing securities fraud, it can devastate a family’s finances, ruin retirement plans and damage other important financial goals. Investors who experience fraud will benefit from having a securities fraud attorney on their side who knows how to recover investor money.
Not Sure What to Do? Reach Out to Our Securities Fraud Lawyers
If you have lost substantial money in an investment and believe you were a victim of securities fraud and aren’t sure what to do next, reach out to a reputable securities fraud attorney for help. Our securities fraud lawyers at Wolper Law Firm have extensive experience bringing financial advisors, brokers and brokerage houses that commit fraud to justice. We are proud of our record of recovering compensation for clients in over 95% of cases we handle. You can learn more about our successful results here.
Our securities fraud lawyers have a greater than 95% success rate. Contact us today at 800.931.8452 to arrange a free consultation. We practice nationwide.
What is Securities Fraud?
Put simply, securities fraud is when brokers and financial advisors use deceptive means to cheat investors of their money in order to line their own pockets. This could mean not disclosing full information about stocks, bonds, and other investments, including failing to:
- Disclose the risks of a securities investment or strategy
- Disclose the cost or commission of a transaction at the time of the recommendation
- Consider and discuss the pros and cons of buying or selling an investment or pursuing a strategy
- Disclose the financial interests their employing brokerage firm has in the investment being recommended
- Put investor interests in front of their own when making recommendations to buy, sell or hold investments
- Disclose all material facts prior to recommending a transaction (i.e., telling you part of what you need to know instead of everything you need to know to make an informed decision).
Securities Fraud Schemes
Securities fraud encompasses a wide variety of specific schemes that dishonest brokers and advisors may employ. Brokers and the financial institutions they work for can be held accountable when fraudulent schemes cost investors large amounts of money. Some of the most common types of schemes to defraud securities investors include:
- Advance-fee schemes. In advance-fee schemes, the schemers encourage investors to pay a fee to invest in a sure thing. The problem is, there is no actual investment to be made. After investors send their fees, they never hear back about the results of their dubious investments.
- Broker theft. Broker theft, also known as embezzlement, is just what it sounds like. Brokers take money from their customers’ investment accounts for their own use.
- High-yield investment fraud. High-yield Investment fraud typically involves promises of very high rates of return on securities, with nearly no risk to investors.
- Ponzi and pyramid schemes. These types of schemes work by paying investors through the added funds of new investors or recruits. Fraudsters use new investors’ money to pay high returns promised to early investors, to make the scheme appear legitimate. The early investors initially receive the returns promised – so long as the scheme continues to grow. When too few new investors are available and existing investors demand a return of their money, the schemes usually fall apart.
- Prime bank schemes – Prime bank schemes involve fictitious financial products. They promise to generate high returns over a short period of time. This type of promise is a classic example of a red flag in the securities industry and financial markets.
- Late-day trading – Late-day trading is the practice of making trades after markets have closed but recording them as having occurred before the markets closed that same day.
- Churning – Churning is when a broker excessively trades assets in order to generate commissions for themselves.
- Stockbroker misconduct. There are countless ways brokers can be liable for investor losses. Various types of stockbroker misconduct include misrepresentation about investments; recommending unsuitable investments for a person’s needs, goals and risk tolerance; lack of portfolio diversification across asset classes, market sectors and geopolitical areas; and more.
These are some examples of ways brokers and financial advisors engage in securities fraud. They can be held liable when investors lose money. The brokerage houses and financial firms that employ dishonest brokers and advisors may also be held liable for a failure to supervise.
At Wolper Law Firm, our securities fraud attorney helps clients who fall victim to these types of fraud. We can help you, too. Give us a call at 800.931.8452 to learn about your legal options.
Why Should I Hire Your Law Firm for My Securities Fraud Case?
A unique differentiator for our securities fraud attorneys is our intricate knowledge of the industry gained by working on both sides of it. Prior to opening Wolper Law Firm to help investors who have been victims of securities fraud, we defended the brokerage firms that we now bring claims against. This comprehensive experience allows us to understand how brokers think and how brokerage houses operate, which is advantageous to our legal clients because it can help us to predict how a claim may progress and stay in front of it.
We are also recognized as ethical professionals within the legal industry and belong to PIABA, a prestigious international bar association whose members focus on representing investors in disputes with the securities industry. Additionally, we are highly responsive to our clients’ problems and can be reached seven days a week. And we provide free consultations, so you can learn whether we are the right attorneys for your matter.
Laws That Protect Investors from Securities Fraud
Investors are afforded protection under both federal and state securities laws. At the federal level, the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and Rule 10b-5 protect investors against deceptive and manipulative acts in the purchase or sale of securities. Rule 10b-5 makes it unlawful to employ a device or scheme to defraud, to make any untrue statement of material fact or omit to state a material fact, or to engage in any practice that would constitute a fraud.
Similarly, most states have enacted comprehensive statutes to protect investors, known as “blue sky” laws. These laws, which can vary by state, generally require companies to register the securities they are selling. They also license brokers, advisors, and brokerage firms.
In addition, the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA), which is a government-authorized organization that oversees brokers, have set forth conduct rules and regulations to protect investors. Violation of these rules and regulations may serve as compelling evidence that your brokerage firm or financial advisor has engaged in actionable misconduct. You can register complaints about your investment advisor or broker at the SEC and FINRA websites. These complaints may initiate investigations of the advisor or broker that could result in fines and other penalties. However, in order to have a chance of getting your money back, you will typically have to go to arbitration or to court.
Recourse for Victims of Securities Fraud
Our Securities Fraud Lawyer Explains the Investment Recovery Process
Most securities industry disputes are resolved through arbitration rather than litigation. The reason for this is that account agreements usually include a statement binding parties to arbitration. FINRA handles almost all securities arbitration. Investors have a maximum of six years from the date that the investment fraud occurred to initiate a FINRA arbitration complaint.
You can also elect to go to mediation through FINRA prior to arbitration. Mediation is voluntary, and both sides must agree to it. If they do, it may be a viable way of settling investor and broker disputes in a less formal proceeding.
Securities Fraud Arbitration
In FINRA arbitration, you’ll have the opportunity to prove to a panel of arbitrators that your broker’s misconduct was directly or indirectly responsible for your investment losses. If the arbitrators come down in your favor, you could be awarded compensation for the losses you endured as well as the various ways your life has been negatively impacted by the losses in question.
Although FINRA arbitration does not provide the wronged investor with opportunity for appeal if they do not win, it is still the preferred option for financial recovery. This is, in part, because if you win, the defendant will be ordered to repay you within 30 days of the decision. If you had gone to court, years may have passed before a decision was made, and more years to get through the appeals process. And, as previously mentioned, litigation may not be an option for many wronged investors.
Securities Fraud Litigation
If you do not have an arbitration agreement, securities fraud litigation in court may be the only way to potentially get your money back. Once one of our securities fraud lawyers reviews all the details of your case, we will advise you about your options for pursuing recovery of your investment money. Call us at 800.931.8452 so we can learn how we can help you. We provide free consultations.
FINRA Conduct Rules that Can Apply in a Securities Fraud Case
The FINRA conduct rules prohibit a broker, brokerage house or financial advisor from engaging in any of the following activity:
- Recommending to a customer the purchase or sale of a security that is unsuitable given the customer’s age, financial situation, investment objective and investment experience
- Recommending particular types of security or amount or frequency of transactions that may be unsuitable for a given customer
- Purchasing or selling securities in a customer’s account without first contacting the customer and receiving the customer’s authorization to make the sale or purchase, unless the broker has received from the customer written discretionary authority to effect transactions in the account or the broker was given discretion as to price and time
- Switching a customer from one mutual fund to another when there is no legitimate investment purpose for the switch
- Removing funds or securities from a customer’s account without the customer’s prior authorization
- Misrepresenting or failing to disclose material facts concerning an investment. Examples of information that may be considered material and that should be accurately presented include: the risks of investing in a particular security; the charges or fees involved; company financial information; and technical or analytical information, like bond ratings
- Charging a customer excessive markups, markdowns or commissions on the purchase or sale of securities
- Guaranteeing customers that they will not lose money on a particular securities transaction, making specific price predictions or agreeing to share in any losses in the customer’s account
- Failing to use reasonable diligence to see that a customer’s order is executed at the best possible price, given prevailing market conditions
- Initiating private securities transactions between a broker and a customer that may violate FINRA rules, particularly where the transactions are done without the knowledge and permission of the sales representative’s firm
- “Trading ahead,” which involves placing an order for the firm’s account before entering a customer’s limit order, without having a valid exception
- Failing to display a customer limit order in a market maker’s published quotes, without a valid exception
- Purchasing or selling a security while in possession of material, non-public information about an issuer.
Securities Fraud Statistics
There Are Good Reasons You Should Work with an Experienced Securities Fraud Attorney
The United States Sentencing Commission reported 142 securities and investment fraud offenders in 2020. Of those offenders, 86.6 percent were sentenced to prison. The average sentence was 46 months.
Reportedly, 84.5 percent of offenders were U.S. citizens, and nearly 84 percent had little or no prior criminal history. They inflicted a median loss of $2.17 million, with approximately 18 percent of securities fraud cases costing more than $9.5 million.
The median loss for securities fraud was $2.17 million, with 18 percent of cases costing over $9.5 million.
Recognizing Whether You Have Been a Victim
Our Securities Fraud Attorneys Encourage Investors to Look Out for These Signs
The securities fraud attorneys at the Wolper Law Firm have handled numerous cases, each one different. However, there are certain aspects to each case that may have similar characteristics.
Before we can determine whether there might have been some element of securities fraud or negligence in your case, we need to review the facts of your particular situation carefully. The specific facts determine how and when the investor protection laws apply.
However, to get a general idea of whether you might have a case against your broker for securities fraud, here are some questions to consider:
- Has there been a sudden, unexpected, and substantial loss in your investment portfolio?
- Have you noticed unusual or mysterious withdrawals or losses?
- Are there trades you don’t recognize and did not authorize?
- Are there many frequent transactions that your advisor cannot explain?
- Has there been an overall decline in your investment portfolio over time?
- Does your securities broker seemed disinterested or lazy in handling your trades?
Steps to Take If You Suspect Fraud
Reach Out to Our Skilled Securities Fraud Lawyer
Even when you are knowledgeable about the schemes and tactics brokers use in committing fraud, it can still be hard to recognize in your portfolio and difficult to determine whether misconduct occurred. A securities fraud lawyer from our firm can examine your account statements for signs of fraud and help you understand the extent of the misconduct after reviewing your documents and statements.
As soon as you suspect potential misconduct, it can be helpful to your case to begin keeping an evidence file that you can present to your attorney and that you can refer to if you file a complaint with the SEC or FINRA. Include the following in your file:
- Information about your broker, including their brokerage firm, their license numbers, and other data
- Statements from your securities accounts
- Notes about each interaction with your financial advisor, including the date, time, purpose of the contact and what was said
- A timeline of events, if possible, including when you opened your securities account, trades you made and interactions with your broker
- Copies of emails, texts and other communications between you and your broker or the brokerage house
- Copies of complaints you made to regulatory agencies or law enforcement.
Contact our securities fraud attorneys today at Wolper Law Firm to learn about recovering your investments. Call us at 800.931.8452 to arrange a free consultation.
Understanding Securities Fraud Elements
Learn How to Protect Yourself from Scam Investments
Educated investors are much less likely to be victims of securities fraud. You can help protect yourself and your money by taking these precautions:
- Walk away from investment opportunities that sound too good to be true. That stock investment that promises high returns with little or no risk is probably fraudulent.
- Don’t allow yourself to be pressured into a quick investment decision. Pressure to sign up quickly is a typical tactic used by bad actors.
- Avoid investment offerings that don’t have any documentation. Companies that sell registered stocks and bonds must file a prospectus that describes the security.
- Don’t buy unregistered securities, which are not subject to all the laws put in place to protect investors. Individuals seeking to commit fraud often deal in unregistered securities.
- Ignore anyone who contacts you with an unsolicited investment offer. Legitimate brokers do not make random phone calls or send random emails offering investment opportunities.
- Stay away from overly complex investment offerings that are hard to understand or don’t make sense. It is likely to be a fraudulent securities investment scheme.
- Check out the reputations of brokers and brokerage houses before you sign up with them. Ask about their backgrounds and credentials. You can also check credentials and whether brokers have disciplinary actions against them by going to FINRA BrokerCheck, the SEC website and visiting securities regulators for your state.
Don’t be afraid to rely on your instincts. If something about a broker and their investment offer does not seem right, walk away.
There are many legitimate brokers and investment opportunities available. If you need legal assistance because you think broker misconduct has cost you substantial money, call our securities fraud lawyer at 800.931.8452.
Talk to an Experienced Securities Fraud Attorney
When you are ready to bring the individual and/or company responsible for your investment loss to justice, you can initiate a FINRA arbitration complaint by scheduling a confidential case review with a highly experienced securities fraud lawyer at Wolper Law Firm.
Our firm is pleased to provide complimentary consultations to those who have been victimized by profit-driven brokers and financial planning institutions. You can take advantage of this opportunity by completing the convenient contact form we have included at the bottom of this page or by giving our office a call at 800.931.8452. Our attorneys are licensed to represent clients nationwide.
Securities Fraud FAQs
Our Securities Fraud Attorneys Answer Common QuestionsFollowing are some general questions and answers regarding securities fraud. For answers to your unique questions, reach out to our securities fraud attorneys to arrange a free consultation. Call our law firm today at 866.814.4549 to get help when broker misconduct has cost you your retirement savings or other investments.
How does someone become a victim of securities fraud?
People who do not regularly review their statements, those who place too much trust in their advisors and people who are not educated about investing are often the targets of unscrupulous brokers. When investing, it is critical that you examine your securities statements regularly and ask questions of your broker if you don’t understand something. Once a broker sees that you are active in reviewing your investments, if they had any plans to commit misconduct against you, they will probably think twice. Also, if your broker cannot answer your questions about transactions to your satisfaction, contact our securities fraud lawyer for help.
Who is most often the victim of securities fraud?
Anyone who invests in the financial markets can become a victim of securities fraud. Victims of securities fraud can be wealthy and powerful individuals or people of more modest means who want to invest their savings for a comfortable retirement. However, within age demographics, the elderly are all too frequently the victims of financial abuse, including securities fraud. Many older people have more money to invest than younger individuals and have invested for a longer period of time, so they have higher sums of money in their investments. They trust in the professional they hire to handle their investments appropriately. Unfortunately, this trust is often misplaced. And if, like many people, they don’t pay close attention to their portfolio, they can easily become the victim of a dishonest broker. If you suspect elder financial abuse of a loved one by a broker or advisor, contact an attorney. The earlier the activity is uncovered, the better the chances of recovering assets and keeping untouched assets safe.
Who commits securities fraud?
Individuals who commit intentional securities fraud can be licensed brokers, financial advisors, brokerage firms and other money managers who are greedy and unethical. They may also be individuals who are simply lazy and negligent in handling their customers’ portfolios, so they don’t fulfill their fiduciary duties, causing investors to lose money. Formerly licensed brokers who have lost their credentials because of previous misconduct, or even people who were never licensed or registered, may pose as professional brokers in order to defraud investors.
Besides paying compensation to investors, what are other punishments for securities fraud?
Individuals who commit securities fraud may have their professional licensing and certifications taken from them. They may also face civil and criminal fines and, if found guilty of criminal fraud, could serve substantial prison time. In the worst and most high-profile cases of securities fraud, people who commit it have been sentenced to decades in prison. However, the average prison sentence for securities fraud is 46 months.