The investment fraud attorneys at Erez Law, PLLC have recovered over $200 million on behalf of our clients who have suffered unnecessary investment losses at the hands of a broker who committed securities and investment fraud, and we are prepared to help you.
If you believe that you’re the victim of such misconduct, call (888) 346-1263 or contact us online to get started. We’re happy to discuss your situation in detail in a free one-on-one consultation with one of our lead securities fraud attorneys.
*Erez Law, PLLC, represents investors on a contingency fee basis. We will not earn a fee unless we are successful in making a recovery for our clients.
It’s normal to have many questions after being defrauded by a brokerage firm or broker you trusted. You may be wondering what type of fraud occurred or how you can be compensated for your loss. Here are some answers to common questions we have received over the years about how much you might recover if you sue a broker or brokerage firm for securities fraud:
What Is Investment Fraud?
Investment fraud happens when brokers and brokerage firms claim that they are acting in the best interests of their investors but, in reality, they are convincing investors to purchase investments and securities with incomplete, deficient, or misleading information or investments that are unsuitable for the investor. Whether by negligence or investment fraud, brokerage firms and financial advisors that have failed to follow industry standards and applicable rules and laws may be responsible for their customer’s losses.
What Is Securities Fraud?
Securities fraud encompasses unlawful activities, including misrepresentation, unsuitable recommendations, excessive trading or churning, over-concentration, unauthorized trading, and Ponzi schemes. These deceptive practices can occur in various investment vehicles, such as stocks, bonds, mutual funds, and options.
The perpetrators of securities fraud often exploit investors’ trust and use false or misleading information to induce them into making investment decisions that ultimately benefit the fraudsters. Securities fraud is also committed when investment advisors recommend unsuitable investments or trade primarily for the purpose of obtaining more compensation for themselves rather than considering what is in the best interest of the investor whose interests they are paid to represent. While perpetrators of securities fraud may face criminal prosecution, victims may be entitled to pursue separate civil action to seek compensation for their losses.
The U.S. Securities and Exchange Commission (SEC) regulates the securities industry in the United States. The SEC’s website provides valuable information about securities regulations, investor education, and enforcement actions against fraudulent individuals or entities. Understanding the laws the SEC enforces can help investors navigate the complex world of securities.
The Financial Industry Regulatory Authority (FINRA) is a government-authorized watchdog that oversees all U.S. broker-dealers. FINRA is a not-for-profit organization dedicated to safeguarding capital market integrity with essential support to investors, policymakers, regulators, and other stakeholders. If you wish to sue a brokerage firm in the United States, you must go through FINRA arbitration.
What Are the Types of Investment and Securities Fraud?
Common types of investment and securities fraud include Ponzi schemes, junk bonds, structured products, and various broker misconducts like choosing unsuitable investments, providing misleading or incomplete information, excessive trading, and churning.
Many investment and security fraud cases we have handled include:
Current Investment Fraud Investigations
Currently, the investment loss attorneys at Erez Law, PLLC are investigating a number of brokers, brokerages, hedge funds, and investment firms for their role in securities fraud and investment losses. Some of these include:
- Easterly ROCMuni Losses
- David Lerner Brokerage Firm
- Northstar Financial Services (Bermuda)
- Steepeners/Structured Products
- Conservation Easements
- Northstar Healthcare Income REIT
- UBS Yield Enhancement Strategy (YES)
- GPB Capital Holdings
- REIT Investment Loss
- GWG Holdings Inc.
- See All Current Investigations
The investment fraud attorneys of Erez Law have the depth, resources, and personnel that other securities fraud law firms – both large and small – don’t possess. Find out if you have a case against your broker by calling Erez Law or filling out our online contact form to get in touch. A dedicated investment fraud lawyer of our team will return your call and collect more information about your situation. Our consultations are always free, confidential, and protected by the attorney-client privilege.
What Is Broker Misconduct?
Broker misconduct is when a broker fails to live up to his or her professional duties. Common types of broker misconduct include misrepresenting risks, selling away, unauthorized trading, failure to diversify, excessive use of margin, or otherwise abusing trust. If a broker has committed securities fraud resulting in an investment loss, you may be able to take legal action against the broker.
When it comes to representing our clients against brokers and brokerages on your behalf, cases we are inexperienced with include:
More Investment Fraud FAQs
You can prevent investment fraud by doing your research. Don’t just rely on what the salesperson tells you. Look up the company and its services or products before investing with them. You can also check out their financial statements and other information on EDGAR. You should spend time looking into the person handling your investment as well, even if you know them. Confirm they have a state license to sell securities and check whether their firm had issues with other investors or regulator
There are multiple warnings signs you can use to determine if you’re the victim of investment fraud. If the company contacts you out of the blue to invest with them, check that they’re a legitimate firm. Bogus companies will rush you to decide to invest with them and have an unreasonable deadline for receiving your money. The email or letter you received from them will likely have spelling and grammatical errors. Check to see if the website they’re working from has a secure link. Secure links are usually identified by a padlock icon on the browser. Any of these warning signs may indicate fraud.
You can report securities fraud to the U.S. Securities and Exchange Commission. There are multiple resources available depending on the specific type of crime you suspect. You can file a complaint online and provide your name and contact information, the suspected company name and details, the offense you believe they committed, and documentation to support your claim.
You can look online for a securities fraud attorney. However, don’t pick the first firm you see. Perform thorough research into their credentials, client reviews, and ratings from legal organizations. Schedule a consultation and gather as much information as possible from the person you meet. You should also ask around for referrals from people you trust, such as friends or family.
Yes, you can sue for securities fraud. The Securities Act of 1933 regulates offers and sales of securities. It requires companies to inform their investors of important financial information and prohibits misrepresentation and other fraudulent activities while selling publicly traded securities. If you suffered losses because of your advisor or the brokerage firm’s fraudulent actions, you could file a lawsuit to recover those losses.
The U.S. Securities and Exchange Commission handles hundreds of security fraud investigations every year. Many investigations result from tips or complaints made by the public. The most common violations involve stealing a customer’s securities or funds, misrepresenting important information about investments, insider trading, manipulating market prices of securities, and selling unregistered securities.
There are several options you can choose from to recover funds lost from a security fraud investment. If there’s a dispute with the broker or firm you invested with, you could file an arbitration claim or request mediation through FINRA. You could seek restitution from the SEC or FINRA through enforcement action. The SEC can distribute financial penalties for the losses investors suffered under the Fair Fund provision of the Sarbanes-Oxley Act of 2002.
The Division of Enforcement is a division of the U.S. Securities and Exchange Commission that investigates securities fraud. They perform confidential investigations to prevent any evidence from being destroyed or going missing and to preserve the reputation of the firm or individual being investigated. After reviewing all the evidence they gathered, they will determine whether there was a violation of securities regulations and recommend whether or not to prosecute.
Securities fraud is a criminal offense. However, penalties could be criminal or civil. Every state has its own securities commission and laws regarding these crimes. If there’s a criminal investigation of the fraud, the convicted party could face a federal prison sentence and fines. If the Securities and Exchange Commission and National Associated of Securities Dealers investigate the allegations and discover fraud, they could impose civil fines against the individual or company.
People commit securities fraud for multiple reasons. One main reason is pressure. This pressure could include being unable to pay the bills, maintaining productivity at work, or not having as nice a car as the neighbors. Pressure combined with opportunity can result in securities fraud, too. The person might see an opportunity to abuse their position at a company by stealing money from an investor. Other perpetrators rationalize their actions by saying they’re borrowing someone else’s money and intend to replace it before the victim realizes what happened. In their mind, they’re not harming anyone because no one knows that they committed a crime. Some employees feel pressure from an authority figure to commit a crime. They might discover security fraud occurred but keep quiet because they don’t want to lose their job. Their boss might even force them to participate in the offense as extra assurance that their subordinate won’t go to the authorities.
How Can an Investment Fraud Attorney Help?
Hiring an attorney to assist with your securities fraud case is almost essential to obtaining a positive outcome. The legal framework for dealing with fraudulent securities or investment trading is complex and requires an experienced lawyer to help you keep track of deadlines and relevant statutes.
A good investment fraud law firm will help you with the following actions:
- Detailed review and analysis of your financial
statements to determine whether fraud occurred. - Hire and retain financial experts to provide
testimony on your behalf. - Thoroughly investigate your claim and gather all necessary
evidence and documentation. - Review SEC violations and current investigations.
- Prepare necessary claim paperwork for submission to FINRA (a not-for-profit organization authorized by the federal government that oversees U.S. broker-dealers. More info below) detailing the type and extent of securities fraud you suffered.
- Assist with all aspects of preparing for and attending your FINRA arbitration.
What Is FINRA?
The Financial Industry Regulatory Authority (FINRA) is a self-regulatory, non-governmental organization that oversees part of the U.S. financial markets. Its mission is to protect investors and provide market integrity. In addition to licensing brokers and financial advisors, FINRA also sets rules for investment brokers and firms about the information they’re required to provide to their clients to help them make sound investment decisions.
What Is FINRA Arbitration?
Many investment agreements include a clause requiring any disputes to be resolved through FINRA arbitration rather than the court system. In an arbitration, up to three arbitrators are chosen by the investors and advisers. These arbitrators then review the information provided, examine the evidence, hear arguments, and issue an award or decision. Though the results of a FINRA arbitration can be appealed to the courts, they are generally considered legally binding.
Contact our Investment Loss Recovery Group Today for
a Free Consultation
If you think you’ve been the victim of securities fraud, it’s imperative to take action immediately to protect yourself. Contact the attorneys at Erez Law for a confidential consultation, and let us review your case to determine whether you have a valid fraud claim. This consultation is completely free, so you have nothing to lose. Let us help you get compensation for your losses. Call (888) 346-1263 today.
*Erez Law represents investors on a contingency fee basis. We will not earn a fee unless we are successful in making a recovery for our clients.