When you engage the services of an investment professional, you have a reasonable expectation that they will put your needs, goals, and concerns above their own bottom line. After all, stockbrokers, financial advisors, and the firms that employ them are bound by securities laws, securities industry rules, and industry standards to do exactly that. Unfortunately, not every investment professional takes these obligations as seriously as they should. If you have lost money in an investment and suspect misconduct, a Miami investment fraud attorney from Erez Law, PLLC can help you understand your legal options.
For more than 28 years, our award-winning attorneys have tirelessly advocated for the rights and interests of people in your position. In fact, we have made it our firm’s exclusive focus. That dedication has led to our 99% success rate and the more than $320 million that we’ve recovered on behalf of our clients in Miami, across the United States, and around the world.
Our attorneys have the resources and experience to take on the biggest firms on Wall Street. We also have the compassion to understand the financial challenges you may be facing after a fraud-related investment loss. That’s why we offer free consultations and work on a contingency-fee basis. It won’t cost you anything upfront to engage our services. If we take your investor fraud case, we will only collect a previously agreed-upon fee once we’ve secured compensation on your behalf. Contact us today to speak with a trusted Miami investment fraud attorney.
What Is Securities Fraud?
Securities fraud involves intentional misconduct, reckless conduct, or negligence that induces an investor to purchase, sell, or hold securities or other investments. This is usually accomplished by providing the investor with false, misleading, or inaccurate information or representations about the securities or investment in question or by withholding information material to the investor’s decision-making.
The victims of the fraud usually lose some or all of their investment, while the perpetrators usually profit. Securities fraud can lead to criminal prosecution and civil liability for financial losses sustained by its victims.
At Erez Law PLLC, we focus on helping defrauded investors recover significant investment losses they incurred due to the actions of brokers and investment advisors. Currently, we are investigating numerous brokers and companies who committed fraudulent actions that harmed investors.
If you are the victim of a fraudulent broker, we are here to help you.
Unsuitable Recommendations
FINRA rules require that broker-dealers, financial advisors, and brokerage firms only recommend investment products that are suitable to their customers. These individuals and entities must have a reasonable basis to believe a particular investment or strategy is suitable for a particular investor. This requires them to complete due diligence and understand their customer’s:
- Current and historical investment portfolios
- Financial situations
- Risk tolerance
- Tax filing status
- Age
- Experience investing
- Liquidity
- Investment objectives
Deviating from this rule can cause unnecessary losses to the investor and make the brokerage firm responsible for the broker’s misconduct. If your broker made an investment for which you could not assume the level of risk, was not consistent with your risk tolerance, or had risks that you did not understand and you suffered losses as a result, you could have a viable FINRA claim against the brokerage firm.
Regulation Best Interest
Regulation Best Interest (Reg BI) is the standard of conduct for broker-dealers and similar parties. This standard does not elevate a regular broker-dealer or stockbroker to a fiduciary. However, it establishes a separate duty of care, one in which the broker-dealer must only recommend financial products to customers that they specifically find are in the customer’s best interests.
Under Reg BI, broker-dealers must:
- Act in the customer’s best interests and not put their own financial interests ahead of the customer’s
- Clearly identify and divulge any potential conflicts of interest or financial incentives that may influence investment recommendations
- Disclose information about why they are making particular investments
- Implement policies that prevent conflicts of interest
- Provide clients with Form CRS, a client relationship summary that outlines the brokerage firm’s services, fees, costs, conflicts of interest, obligatory standards of conduct, and a review of its disciplinary or legal history
- Exercise diligence, care, and skill when making recommendations
- Have a reasonable basis to believe their recommendation is in the customer’s best interest
- Not refer to themselves as advisors if they are not subject to a fiduciary duty
- Comply with policies designed to fulfill their obligations
Signs That You May Have Been the Victim of Securities Fraud, Breach of Duty, or an Unsuitable Investment
While all investments can lose value due to normal market conditions, these signs should prompt you to speak to a Miami securities fraud attorney. A seasoned lawyer can investigate the circumstances of your investment loss to determine whether it was the result of fraudulent activity.
- Your broker failed to discuss your investment objectives with you and simply invested in the same products as all their other customers.
- Your broker failed to inform you about the risks of an investment before investing in it.
- An investment’s regular financial results never meet previously announced performance expectations.
- An investment experiences a dramatic drop in value in a short period of time.
- Material information about an investment is not disclosed in a timely fashion.
- Your broker made unauthorized trades on your behalf or committed “churning” to get more fees.
- Your broker fraudulently deceived you into making investment decisions that were not in your best interest.
How a Miami Investment Fraud Attorney Can Help You
If you have been the victim of securities fraud, let a Miami investment fraud attorney at Erez Law, PLLC help you pursue financial recovery by:
- Investigating your case to recover all potential evidence of fraud
- Calculating the losses that you have sustained, including the lost value of your investment and other expenses that you incurred because of the fraud
- Identifying the perpetrators of the fraud and other parties that can be held liable for your losses
- Preparing and filing cases in FINRA Dispute Resolution/Arbitration against brokerage firms, in AAA or JAMS arbitration against RIA, or in court, as required
- Fighting fiercely for maximum financial compensation for your investment losses
Common Types of Securities Fraud Cases Our Firm Helps With
The Miami investment fraud attorneys at Erez Law, PLLC can help you with a case arising from:
- Hedge fund fraud – Hedge funds pool the money of fund participants to make investments according to strategies selected by the fund’s managers. These managers may fraudulently withhold material information about the fund’s strategies from those who invest in them.
- Junk bond fraud – The term “junk bonds” refers to debt securities issued by financially distressed companies or companies with poor credit ratings. Issuing companies may make fraudulent disclosures regarding the bonds, and funds that trade in junk bonds may defraud their own investors.
- Ponzi scheme fraud – In a Ponzi scheme, investors are promised returns that exceed the performance of the broader market. In reality, existing investors are paid cash dividends and distributions from money obtained from new investors, rather than from the performance of any actual investment.
- Private placement fraud – This describes fraud that arises from the investment-raising efforts of startups and non-publicly traded companies, which may be considerably more volatile than established firms.
- Stockbroker fraud and misconduct – This includes making investment recommendations and decisions based on the financial gain the broker stands to make rather than whether an investment serves a client’s best interests.
- Elder financial fraud – Some brokers and firms prey on elderly investors, assuming they will be less able to recognize fraudulent investment behavior. They could also recommend investments that are unsuitable to them, such as high-risk products when the investor wants to retire shortly.
- Structured notes fraud – Because investors risk the possibility of losing the principal they invest in structured notes, FINRA has special rules related to recommendations for them. Brokerage firms must not misrepresent the investments as conservative or predictable, must conduct due diligence to determine if the recommendation is suitable and in the best interest of the particular customer, train their financial advisors on these products, provide a fair and balanced presentation of the risks and benefits of the investment, and diligently supervise advisors who recommend them.
- Churning/excessive trading fraud – Churning or excessive trading occurs when a broker completes many trades in an account, usually for their financial benefit by generating commissions.
- Options fraud – Broker-dealers may misrepresent or omit material information when recommending options, overconcentrate investors’ portfolios in risky option trades, makie unauthorized trades in options, or make unsuitable investment recommendations based on the customer’s objectives, risk tolerance, or experience.
- Selling away fraud – This type of fraud involves a broker recommending investments that their employer has not approved. Broker-dealers are required to rigorously scrutinize investments to ensure they are suitable and in the customer’s best interest, but selling away fraud occurs when broker-dealers recommend investments that have not gone through the approval process.
What Are Securities Fraud Attorneys’ Fees?
If you have lost money as the result of securities fraud, you should not have to bear the additional financial burden of paying for an attorney to help you recover your lost investment and other expenses. That’s why the investment loss attorneys of Erez Law, PLLC, handle securities fraud cases on a contingency fee basis.
Under this arrangement, you will not pay us anything upfront when you engage our services. Instead, we are paid a fee only after we have secured a financial recovery for you. This fee is a previously agreed-upon percentage of the recovery.
What Is the Securities Fraud Statute of Limitations?
Both federal and Florida state securities laws place time limits, known as statutes of limitations, on how long you have to file a fraud claim. The Financial Industry Regulatory Authority (FINRA) also limits the amount of time investors have to take legal action.
Because these time limits and regulations can be so complex, it is crucial to seek legal advice as soon as you suspect you have suffered a fraud-related investment loss.
Talk to Our Miami Securities Fraud Attorneys Now
When you have sustained financial losses due to investment fraud, you deserve justice in the form of financial compensation. Contact Erez Law, PLLC today for a free and confidential consultation with our Miami securities fraud lawyers. We will explain your legal options and determine whether we can help you pursue compensation in an investment dispute.