Washington Securities Fraud Attorney

Investors often rely on a dealer or broker to ensure that they are building the strongest portfolio possible. But financial advisors don’t always have their clients’ best interest at heart. If you’ve been defrauded as an investor, a Washington securities fraud attorney at Wolper Law Firm can stand up for you using both state and federal securities laws. Washington investors have significant protections available to them, and may even be able to recover a percentage of stolen or lost funds with the help of a FINRA complaint or securities lawsuit.

Our firm has years of experience handling investment fraud cases nationwide. We offer complimentary consultations in order to help you understand how we may be able to help if you have been victimized by a securities fraud scam. There is no shame in being taken advantage of by someone determined to mislead you. Let us put your concerns to rest and focus on what can be done to maximize your recovery.

The Basics of Securities Fraud

Financial fraud schemes are characterized by a calculated misrepresentation of material facts. Investors are purposefully misled, whether about the specifics of the opportunity, the amount required to buy in, the legitimacy of the stock or security, the complexity of the investment, or other deciding factors. Common securities fraud elements include:

• Making promises that seem too good to be true, such as promising record profits or guaranteed returns
• Saying an opportunity is “no-risk”
• Fabricating false reports or financial records
• Purposefully using obscure language to confuse investors
• Advance fee scams
• Ponzi or pyramid schemes
• Disappearing brokers
• Embezzlement
• Boiler room sales tactics to increase pressure
• Microcap fraud
• Purposeful omissions or misstatements to auditors
• Front running
• Pump-and-dump schemes that artificially inflate stock prices
• Churning to generate commissions and fees

What to Do If You’ve Lost Money Due to Securities Fraud in Washington

If you suspect securities fraud in Washington, do not wait to contact an attorney. The sooner you act, the sooner you can stop the cash flow to a fraudulent source and minimize the damage. Do not throw good money after bad by sending a scam artist more funds, no matter what they say. Instead, you should:

• Document every interaction that you have had with the broker or financial advisor. Include emails, text messages, and any statements or financial accounting that they have given you. Write down any in-person interactions you can remember. Do not omit social media posts about investments or any other source of information.
• Make copies of your account information, statements, records of charges, and enrollment paperwork. If you have ever been asked to wire money, gather records of that as well as any additional payments you have made.
• Report your suspicions to a regulatory agency. The Washington State Department of Financial Institutions (DFI) offers ways to check on registrations as well as listings of reported scams. Speak to an agent in order to file a complaint.
• Contact a securities fraud attorney. Speaking to a supervisor or state agency can help create a written record, but it is unlikely to recover your funds. Working with a securities fraud attorney gives you the best chance to pursue restitution.

How a Securities Fraud Attorney in Washington Can Help

At Wolper Law Firm, our securities fraud attorneys can help you investigate, gather evidence, build a strong claim for recovery, and file a securities fraud lawsuit or arbitration claim on your behalf. We can work with forensic accountants to spot additional fraud that the layperson might miss and unravel scams that rely upon shell corporations, hidden transactions, improper trades, and other purposefully oblique capital market tactics. We can also help negotiate a fair settlement, and push for you to receive the maximum amount possible in restitution.

An Overview of Washington Securities Laws

The Washington Securities Division is responsible for overseeing the state securities market. Chapter 21.20 RCW outlines the Washington Securities Act, governing unlawful sales and purchases, unlawful investment advice, and registration requirements, among other elements. Under this state statute, it is unlawful for any person in connection with the offer, sale, or purchase of a security to:

• Employ any device, scheme, or artifice to defraud
• Make any untrue statement of a material fact
• Omit a material fact necessary to prevent a statement from being misleading
• Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

How Do Federal and State Securities Laws Intersect?

Real estate developers, private equity fund managers, business owners, and those raising capital in Washington State must comply with state Blue Sky Laws as well as SEC Regulation D, specifically Rule 506(b) and Rule 506(c). Covered securities must be registered within state and federal guidelines in order to be offered for sale. However, intrastate offerings, such as securities limited exclusively to Washington investors, can be governed by Blue Sky Laws only. Once investors across multiple states are involved, securities are subject to additional SEC Regulation D exemptions.

Federal laws most often supersede state regulations, but Washington securities laws do provide additional protections and transparency for investors. When bringing your claim, our experienced investment fraud attorneys can ensure that your case pursues every securities fraud penalty possible.

Common Violations of Washington Securities Laws

Securities fraud is not just insider trading or Wall St. white-collar crime. It often involves average people, such as first-time home buyers, retirees, or those looking for life insurance, and people looking to diversify their portfolio. Some of the most common violations of securities fraud in Washington include:

• A broker who makes unsuitable investment recommendations and loses money. They may fail to take into account your age, investment experience, liquidity needs, or other factors they are required to consider.
• A broker who does not perform due diligence on an investment opportunity and recommends an ongoing scam.
• Unauthorized trades being made on your account, or “churning,” in order to generate commissions and fees with no benefit to the account holder
• Affinity group fraud, where a group with shared connections of trust is taken in by a persuasive leader or group of scam artists
• Pump-and-dump schemes, where stocks are sold with artificially inflated prices before being “dumped” at their real value. These might involve celebrity endorsements, internet hype, or other methods to misrepresent their value.

A Real-Life Example of Securities Fraud in Washington

Securities fraud can have serious financial and emotional consequences for victims. In one real-life case, James Costello, a 42-year-old man from Bellevue, Washington, was sentenced to 12 years in prison for orchestrating a scheme that misled investors and resulted in millions of dollars in losses. He acquired two penny-stock companies, GRN Holding Corporation and Hempstract Inc., and falsely promoted them as highly successful businesses. Costello deceived both friends and strangers by fabricating his credentials, making false statements in press releases and securities filings, and using social media to manipulate stock prices.

Between 2019 and 2021, over 7,500 investors in GRN Holding Corporation lost approximately $25 million due to Costello’s fraudulent claims, while private investors in Hempstract Inc. lost another $6 million. He also misled investors in three marijuana businesses, causing additional losses. To inflate stock prices, he hired someone to post online about his investments, generating $625,092 in a pump-and-dump scheme. Meanwhile, he used investor funds for personal expenses and attempted to flee when authorities caught on.

In addition to his prison sentence, Costello was ordered to pay $35 million in restitution. His case highlights the lasting impact of securities fraud and the importance of protecting investors from deceptive schemes.

Contact Wolper Law Firm if You’ve Been the Victim of Securities Fraud

Wolper Law Firm has a track record of successfully handling securities fraud cases, with a 99% success rate in recovering funds for our clients. Our background in corporate securities law and experience representing both investors and financial firms give us a strategic advantage in navigating these claims. We understand how the other side operates—and we use that knowledge to fight for defrauded investors. Contact us today to see how we may be able to help you with your claim.