What to Do If You’re a Victim of Investment Fraud

19 February, 2024

If you have been victimized by investment fraud, you are not powerless. As the victim of investment fraud, you have legal rights that you should learn.

There are steps that you can take to try to recover your money after becoming a victim of investment fraud. You should also proactively deal with the mental health aspects of being a financial crime victim.

Most importantly, you should hire an experienced investment fraud lawyer to help you pursue all of your available remedies. The attorneys at Rikard & Protopapas will fight for you at every step of the way, as you seek to get back what was taken from you. Here are some steps to take when you have been the victim of investment fraud.

Report the Fraud to Regulators and Law Enforcement

You should make sure that the appropriate authorities are aware of the fraud, so they can investigate and take action. There are multiple regulators who you can contact to report the fraud, including:

  • The Securities and Exchange Commission, which is the federal regulator for the securities industry. The SEC has investigative authority, and they can take civil enforcement action, or they can refer the matter for criminal prosecution
  • FINRA, which is the self-regulatory body. All broker-dealers must belong to a self-regulatory organization. FINRA also has enforcement authority to fine, suspend or bar members.
  • NASAA, which is an association of state securities regulators. Criminal or enforcement action can also be taken on the state level, under state securities or anti-fraud laws.

You may also want to report the investment fraud to law enforcement. Your state’s attorney general is tasked with consumer protection, and they often investigate and take criminal action. You can also report the fraud to local law enforcement or the local state’s attorney or district attorney.

You should report the fraud to as many regulators and law enforcement agencies as possible, in the hopes that one will pursue the case and take action.

Protect Yourself from Future Investment Frauds

In all likelihood, you may be targeted again in the future. You should learn what you can to avoid being a victim of fraud. You can take the following steps to protect yourself:

  • Know the tactics that fraudsters use to entice you into fraudulent investments, including vague promises of riches — remember that if something seems too good to be true, it almost always is.
  • Be prepared to end the conversation quickly with someone who is trying to sell you a fraudulent investment.
  • Ask many questions of your own to the person trying to sell you, including “if this opportunity is so profitable, why are you giving it to me?”
  • Ask advice from a trusted friend or family member and run the situation by them.

Most importantly, you should eliminate fraudsters’ ability to solicit and contact you. If you are not on the national Do-Not-Call Registry, you should put yourself on the list.

Deal with the Mental Health Effects of Being Victim of Investment Fraud

Being the victim of investment fraud is a traumatic experience. Someone who you have trusted has taken advantage of you. They now have your hard-earned money. It is difficult to come to terms with the fact that you have been victimized.

A FINRA study shows that two-thirds of investment fraud victims will experience mental health issues that are related to stress, such as anxiety and insomnia.

You should consider speaking with a mental health professional to help you deal with the traumatic aspects of the experience. You can be proactive about getting help to discuss the situation.

In addition, you should empower yourself to deal with the situation. Being a fraud victim can definitely knock you back on your feet, but you also have rights. You should take the time to learn your rights and know that you may have legal options of your own.

You Can Fight to Get Your Money Back in Arbitration

One of your main rights is to initiate FINRA enforcement action against the person or brokerage who defrauded you, assuming that they are registered with FINRA. There is a chance that you could get some of your money back, although fraudsters often tend to spend or dispose of your money quickly after taking it.

Contacting an experienced investment fraud lawyer is one of the first steps that you should take after you have been victimized by investment fraud. An attorney could learn more about your situation and advise you about the right actions to take. They can let you know whether it makes sense for you to pursue FINRA arbitration.

It usually never hurts to try to do everything within your power to recover as much money as possible. There are times when you can get some or all of your money back. Everything that you can get helps.

If you file for FINRA arbitration, you and the other party would select arbitrators from a list generated by FINRA. The arbitrator would have the power to issue a binding decision that could order the other party to pay you money. This decision cannot be appealed.

Your attorney would have the right to present evidence and question witnesses in a hearing in front of the arbitrator. Even if you were awarded money in arbitration, you may need help collecting from the other party. They may not have the immediate resources to pay you. An investment fraud attorney would help you take the steps necessary to enforce the judgment.

Contact an Attorney if You Are a Victim of Financial Fraud

The attorneys at Rikard & Protopapas never lose sight of why we are in the practice of law. We are here to fight for the rights of fraud victims and try to help you get your money back. We will leave no stone unturned in the pursuit of justice.

You can schedule a free consultation to discuss your case by calling us today at (803)-805-7546 or by sending us a message online.

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