Investment Fraud Lawyers

Approximately 13 million Americans are affected by investment fraud each year. This figure is based on various studies and reports from financial regulatory bodies and consumer protection organizations. Investment fraud can include Ponzi schemes, pyramid schemes, and other deceptive practices that result in financial loss for investors. Often, victims don’t understand they’ve suffered losses until long after the fact. While efforts can always be made to recover compensation from corrupt brokers, advisors, and institutions, the strongest cases are always made early on. For this reason, it’s a good idea to learn the basics of investment fraud as well as how an experienced investment fraud lawyer can assist. Count on the investment loss attorneys of Rikard & Protopapas to serve you.

Common Types of Investment Fraud

Investment fraud boils down to cheating people out of their money, and it’s typically done by an unethical financial advisor, broker, or firm. The individuals who handle people’s investments are known as fiduciaries, which means the law expects them to put the interests of others (namely, the investors who have trusted them with their money) before their own.

When this doesn’t happen, and investors lose money, it is more likely than not that fraud has been committed. These are some of the most common types of investment fraud:

• Misrepresentation: Misrepresentation occurs when a fiduciary either withholds material information (which would affect the investor’s decision) or provides the investor with misleading information. A classic example is not accurately disclosing the risks of a particular stock.
• Inappropriate recommendations: Brokers and advisors should learn about the investor’s risk tolerance and objectives before recommending investments. Failing to do so, or making recommendations that don’t match these tolerances and objectives, may constitute fraud.
• Late-day trading: This is the illegal act of executing a trade after normal market hours but recording the transaction as if it occurred before the market closed. It should not be confused with after-hours trading, which is legal.
• Unauthorized trading: Brokers generally must have the consent of investors before executing transactions. While there are exceptions to this rule, violating it may be considered unauthorized trading.
• Churning: It’s perfectly legitimate for brokers to charge commissions on trades. Churning, however, is the act of deliberately engaging in excessive trading to generate commissions.
• Embezzlement: This may be the simplest form of fraud and involves stealing or misappropriating the investor’s money. Misappropriation can include “borrowing” (without permission) the investor’s money to use for personal expenses, which is fraudulent even if the money is returned.
• Pyramid schemes and Ponzi schemes: These are similar in nature. With a Ponzi scheme, new investors are lured in and paid with the funds of older investors. Pyramid schemes are essentially the same except the victims are promised the chance to also make money.

What Is an IUL Lawsuit?

A new type of fraud becoming more typical, which we have experience with, is IUL fraud. IUL refers to indexed universal life. It’s a form of permanent life insurance that lasts for the rest of the policyholder’s life as long as they make premium payments. It consists of two parts:

• Cash value, which is like equity
• Death benefits that pay beneficiaries after the policyholder dies

IUL lawsuits have been filed based on the misrepresentations and fraud that are inherent in many of these products. More specifically, claims have been made alleging:

• Deceptive sales practices
• Failure to accurately disclose costs and risks associated with IULs
• Predatory sales practices against the elderly
• Falsely selling an IUL as an investment plan
• Mischaracterizing the basic terms of an IUL
• Lying about or failing to explain complex IUL terms
• Using unethical funding schemes

A victim can potentially file a lawsuit for deceptive marketing practices and excessive fees. Our experienced investment loss attorneys are ready to assist.

Signs You Need an Investment Fraud Lawyer

It’s time speak with an investment loss attorney if you notice any of the following red flags:

• Sudden and unexpected loss of value in your investment accounts
• Transactions you didn’t authorize, don’t recognize, or don’t understand
• Unexpected large gains or losses in your accounts
• Steady losses in your accounts over time
• Large numbers of transactions, especially occurring close in time
• High-pressure sales tactics
• Unrealistic promises of little to no risk
• Unrealistic promises of profits or gains
• Complex terminology and refusal to adequately explain it
• Avoiding questions or refusing to return calls or emails
• Lack of active licensing or certifications
• Difficulty getting your money out of the account or cashing out

How Investment Fraud Attorneys Can Help

An experienced investment fraud attorney will start by reviewing the circumstances surrounding the incident and obtaining evidence to determine who was responsible. Next, your attorney will likely pursue arbitration through FINRA (the Financial Industry Regulatory Authority), a private self-regulatory organization that handles licensing, registration, arbitration, and enforcement concerning investment fraud.

If a lawsuit becomes necessary, we can take that route as well. We stand up to fraudulent brokers, corporations, and other financial institutions that victimize and prey upon investors. We use all available legal tools such as discovery to prove that fraud happened and seek the maximum legal damages for our clients.

Contact Our Investment Fraud Attorneys

Have you or a loved one been a victim of investment fraud? Have you noticed activity that appears suspicious and you want to protect your investments? Reach out to us at Rikard & Protopapas. Our investment loss attorney is ready to get to work fighting for the damages you deserve. Give us a call today.

Frequently Asked Questions