People invest in stocks and other financial securities to save for retirement and future goals. It’s natural to trust financial advisors, brokers, and other professionals with hard-earned money. Securities and investments are complex, and you expect those professionals to conduct your business. If you suffer large financial losses, it might be due to market fluctuations or a dishonest broker. You need an experienced securities attorney to help you discover the truth.

Losing money on your securities and investments is bad enough. Losing it because you believe your broker or financial advisor has cheated you is worse. If you believe you have been a victim of intentional misconduct or negligence and need a California securities fraud attorney, the attorneys at Wolper Law Firm, P.A. are here to help.

What is Securities Fraud?

Simply put, security is an ownership stake in a company. Securities can earn investors returns, or lose money when they underperform. Seemingly natural events like drops in stock price and changes in profits due to withholding of crucial information can point toward securities fraud.

California state law protects investors against different kinds of securities fraud. Sections § 25400 and  § 25401 of the California Legislature’s Corporations Code prohibit fraud when buying, selling, or trading securities. It is illegal for anyone in the state of California to offer false or misleading information or to omit crucial information on the buying and selling of securities. Conducting false or misleading trades in the market, such as pump and dump schemes or churning is also prohibited under state securities fraud statutes.

Federal law also proscribes certain actions that fall under the broad category of securities fraud. Section 10(b) of the Securities Exchange Act, 1934 (“Section 10(b)”) as well as Rule 10b-5 of the implementing regulation prohibit material misrepresentations and misleading omissions in connection with the purchase or sale of securities. To prove a violation of such provisions, the defendant must have acted with “scienter”, or with a state of mind to deceive, manipulate, defraud, or act with significant recklessness towards an investor (Aaron v. SEC, 446 U.S. 680, 691 [1980]).

Securities Fraud Elements

It is unfortunately easy for a crooked broker to defraud an investor and equally difficult for the investor to realize what happened. Many bad brokers rely upon the complexities of investment accounts and the trust that they have built as professionals in the field to mislead their clients for long periods of time.

If you suspect securities fraud in California, a securities fraud lawyer can help you file a complaint using Section 10(b) as well as the California Corporations Code to prove the following:

• Your broker or corporate official made a misstatement or omission
• This omission was connected to your purchase or sale of a stock, bond, or security
• This misstatement or omission was made with the intent to defraud or significant recklessness, i.e. scienter
• You suffered an economic loss due to your reliance on the misstatement or omission

Securities Fraud Examples

Securities fraud is unfortunately more common than many would like to believe. Some examples that we see at Wolper Law Firm include:

• Ponzi schemes: If you’ve been promised high returns with no risk, you may be the victim of a Ponzi scheme. This classic scam involves investors who put their money in, expecting big profits, while those “profits” actually come from the money paid in by new victims. Eventually, the illusion collapses when the person behind the scam absconds with the money.
• Affinity fraud: People within social, religious, cultural, or ethnic groups may be more vulnerable to fraud by others who seem to share their background. Church investor groups, veterans’ associations, or immigrant families suffer from affinity fraud by people who come armed with recommendations from trustworthy sources.
• Pyramid schemes: Pyramid schemes are notorious for promising false profits and pressuring existing members to recruit new investors into the scam.
• Churning: Churning is an illegal maneuver when a broker initiates excessive and unnecessary trades in a client’s account to generate a higher commission or take advantage of transaction fees.
• Misrepresentation: Making misstatements or purposeful omissions around the purchase or sale of securities is prohibited by both California state and federal laws.
• Pump and dump: In pump and dump schemes, certain cheap stocks are “pumped up” through misleading statements and illusory sales, only to be “dumped” back into the market.

Common Perpetrators of Securities Fraud in California

A securities fraud investigation can uncover every party who is responsible for your losses. Common culprits include:

• Individual brokers
• Financial advisors
• Investment banks
• Hedge fund managers
• Publicly traded companies

Signs of California Securities Fraud

In a volatile financial market, you can’t always assume that a poorly performing portfolio is your broker’s fault. A prudent investor should keep an eye on the market and their investments and understand what their portfolio is supposed to be doing. You need not know all the complexities of investing, but you should have some idea where your money has gone and what it is doing.

Financial advisors and brokers have a fiduciary duty to their clients. This means that they must always act in their clients’ best interests, not engage in self-dealing or misuse of funds, and be open with their clients.

If you notice any of these signs of securities fraud, you should have your attorney investigate further:

• Your broker recommends investments that are unsuitable or do not align with your previously stated financial goals and acceptable risk.
• Your broker misrepresents speculative or complicated investment opportunities or fails to fully explain new opportunities when asked.
• You see large, unexpected losses in your portfolio when the market is performing well or, alternatively, sudden gains in your portfolio when the market abruptly drops.
• There are multiple transactions which were not authorized, especially if they take place in a short period of time.
• Your broker abruptly becomes difficult to find, won’t answer your phone calls, or seems disinclined to answer questions.
• There is money missing which cannot be accounted for or which your broker cannot explain.
• Nearly all the investments your broker recommends are losing money.
• Your broker uses pushy sales techniques or pressurizes you to invest quickly.
• You are missing statements, or seeing mistakes on the financial records you receive.

Common Types of Securities Fraud Cases Wolper Law Firm Handles

At Wolper Law, our legal expertise ranges from traditional stocks and bonds to mutual funds, hedge funds, and penny stocks. Some of the case types we handle are:

• Investment fraud: Whether you have been victimized by unsuitable recommendations or embezzlement, the results can be devastating to your portfolio and financial goals. Our attorneys handle all kinds of investment fraud, and may even be able to pinpoint areas of additional liability that others might miss.
• Accounting fraud: When you see regular errors on documents and accounting paperwork, it may be a sign that something larger is at play. Even small errors like regularly misspelled names or addresses may point to issues of identity theft or misrepresentation.
• Advance fee fraud: Be wary of opportunities that ask you to pay a fee upfront for access. All too often, the perpetrator simply vanishes with your payment, or makes increasing demands that you will be more likely to succumb to for fear of sunk cost.
• Insider trading: Insider trading involves buying or selling a company’s stock based on certain material or non-public information about such company. This undermines the fairness of the stock market and can be difficult to spot without a trained financial misconduct attorney on the case.
• Elder financial fraud: Many elders fall prey to financial fraud due to factors like conservative fiscal goals and changing technology. At Wolper Law Firm, we help our senior citizens recover lost money from financial fraud.
• Broker misconduct: If a broker misled you or otherwise acted deceptively to hide important information, you may be a victim of broker misconduct.
• Market manipulation: If you believe someone is trying to manipulate market prices using methods like churning, pump and dump schemes, spoofing, and more, it may be time to contact an investment fraud lawyer.
• High-yield investment programs: Many high-yield investment programs are run by scammers promising 30 to 40% returns daily, weekly, and monthly with no ability to back up these outsized claims.
• Junk bonds: Bonds are traditionally seen as more secure than stock investments – however, they still carry some degree of risk. If you have been sold a portfolio stuffed with corporate junk bonds or high-yield bonds by companies with heightened financial risk, you may be eligible for compensatory damages.

Make Sure Your Finances Are Secure

You should always check out your broker or financial advisor before investing with them. Just as you wouldn’t trust your car to an unknown mechanic, you shouldn’t trust your money to an unknown brokerage. Multiple agencies and government sites will let you verify the credentials of brokers, brokerage firms, and financial advisors. If you find anything that alarms you, these sites also have mechanisms to report misconduct or fraud:

• FINRA BrokerCheck
• SEC Check Your Investment Professional
• Securities regulators by state

You should also use your common sense. Protect your money the same way you would protect anything else:

• Say “no” to investment opportunities that sound too good to be true.
• Don’t allow yourself to be pushed into quick investment decisions.
• Walk away from securities that don’t have documentation.
• Don’t buy unregistered securities.
• Ignore anyone who contacts you with an unsolicited securities offering.
• Report fraudulent or suspicious behavior. Let the regulators make the determination.

What To Do If You Suspect Fraud

Your brokerage firm or financial advisor is supposed to place your interests first. Unfortunately, as countless investors can attest, some brokers do not uphold that responsibility. If you believe you are the victim of any of these kinds of financial fraud, take the following steps as soon as possible:

• Contact a California securities fraud attorney: A securities fraud lawyer can help you unpack the key issues based on your case details, guide you on the next steps, help navigate the legal system, and maximize your chances of getting your money.
• Gather documentation: Based on your attorney’s advice, you might need to collate bank statements, financial records, and any written communications between you and your broker.
• Report the situation to a supervisor: Contact your broker’s supervisor or manager to report your concern.
• Submit a tip to the Securities & Exchange Commission: While submitting a tip, you would need the license number of your broker, their details, and information about the products or securities that you were sold.

Why Do I Need a California Securities Fraud Lawyer?

There are no guarantees in the investment world. Every investment carries risk, and some carry more risk than others. World events can cause upheavals nobody can predict. If you invest in the securities market and lose money, it does not necessarily mean your advisor or stockbroker did anything wrong.

The complex nature of securities and investments means that to prove fraud or negligence you must show a repeated pattern of improper transactions, deliberate attempts to mislead you, or constant inattention to detail or instructions. These actions must also be violations of federal or state laws. A layperson isn’t expected to know all these rules, so you’ll need a knowledgeable California securities fraud attorney to help you. Wolper Law Firm can help you with all of the following areas of your claim:

• Understanding of the nuances of securities law: Our California securities fraud lawyers understand legal nuances and accordingly, will investigate your case thoroughly. They might examine your account statements, broker communications, and other documentation to assess whether anything is amiss and establish what has gone wrong with your account.
• Experience in carrying out securities fraud investigations: Securities investigations may involve collaboration with state and federal agencies as well as financial partners. Our firm is experienced in acting as a dedicated liaison for your interests, while ensuring no stone is left unturned when building your claim.
• Legal support and guidance to deal with the aftermath of securities fraud: Securities fraud lawyers provide guidance and support when you have been taken advantage of by another professional. We can help ensure that the rest of your investments are safe, explain the situation in plain English, and intervene on your behalf with your brokerage firm.
• Working knowledge of all legal avenues of recovery: A securities fraud settlement may be the best path forward for your claim, or you may receive a swifter and better offer through arbitration with the Financial Industry Regulatory Authority (“FINRA”). Our attorneys will be able to advise you about all possible areas of recovery, and represent your interests regardless of what you choose.
• Trial and negotiation experience: Our firm can file a lawsuit against those who have defrauded you to seek compensation on your behalf., We are experienced negotiators trained to fight for your best interests in the courtroom and outside of it.

How Can Wolper Law Firm Help With Recovery After California Securities Fraud?

Wolper Law Firm is a client-focused law firm that helps clients recover investment losses. Our securities fraud attorneys in California can pursue claims nationwide in state and federal courts, appear in arbitration before the FINRA, American Arbitration Association (“AAA”), and Judicial Arbitration and Mediation Services, Inc. (“JAMS”). Our attorneys can represent you in court no matter where the case is being heard.

Investment fraud recovery requires an experienced attorney who can take your case from your first consultation through the trial phase. We prepare each case as if we were going to trial tomorrow, so we are ready from the beginning with all the facts in your case. Our goal is to develop a trusting partnership with our clients that will last.

California Securities Fraud Lawyer: FAQs

Reach Out To a Diligent California Securities Fraud Lawyer

Fraudsters know that most people will be unsure whether they’ve really been defrauded and too ashamed to admit they were fooled. They take advantage of this confusion and embarrassment to continue their fraud.

At Wolper Law Firm, we know that what happened was not your fault. We’re here to help get your money back. We will investigate the facts of your case and talk to the people involved and find out what happened to make it possible. Once we learn all the details of your case, we’ll advise you about the paths to financial recovery that may be available to you. We will let you know the best ways to proceed after the investigation concludes and the litigation begins. We have a 99% success rate in recovering our clients’ money, and we will do our best to help you, too.

Call or visit our website to schedule a free confidential consultation with Wolper Law Firm.