6 Tell-Tale Signs When It’s Time To Call a Securities Fraud Lawyer

Category: How-tos

Imagine having invested your hard-earned income for your retirement in the financial market or stocks through a broker who promises to double it as time goes. Then one day realizing you have fallen victim to an unscrupulous scam and lost all your life savings. It could have been bad financial investment advice or investment fraud, but for you, your retirement savings are gone.

Financial investments are known as securities. When an individual or business distorts the market information so that the value of the securities is affected, it can cause inflation or depreciation of the stock price. This can further lead to losses.

Though it is a common fact that losses can occur because of the volatility of the market, sometimes dishonest the broker or brokerage firm use this as an excuse to benefit for themselves. They try to bring in more money for themselves rather than the investor.

This is not a fun topic but it is necessary to understand the existing security frauds and how being a victim of one can affect you badly. If this has happened to you or someone you know, the first thing to know is that you are not alone nor should you be embarrassed about being a victim of such frauds. Some of the smartest investors on Wall Street have been victims of security frauds. 

6 Warning Signs That Should Alert You Against Security Frauds. 

There has been a total of 600 percent increase in the investment market since the last decade. As the investment increases, it brings along with it the dangers of scams and frauds which happen almost every day in the financial world. Following are the 6 warning signs you should look out for from your broker to make sure you are not a victim of such scams:

  1. Your record-keeping doesn’t match the financial statements provided by your broker.
  2. The fees of your financial statement that was initially agreed upon are different.
  3. Your statement shows unauthorized and abrupt trades.
  4. Your broker has heavily invested on your behalf one particular investment
  5. You always seem to lose money though your broker doesn’t.
  6. Excessive trading from your account.

Types Of Security Frauds

Learning and educating yourself on the types of security frauds can help you prevent losses and become a victim to one. The most common types of security frauds are:

Insider Trading

This kind of trading is based on information that is kept private and not available to the public. It is legal when corporate insiders like employees buy and sell shares in their own companies with the information that is common and available to all. However, insider trading becomes illegal when the insiders rely on information that does not have public access and trade based on that.

A good example is an insider or employee of a corporate giving private information of the stock of their company to their friend or ‘tips’ which influence their decision to buy. This is considered illegal. 

Accountant Fraud

This form of fraud which grew heavily in the early 2000s, includes financial reports which are falsified. Investors are misled by untruthful financial records. If this type of fraud goes unnoticed, the losses can be very high. Merging debts into one amount to falsely show improved liquidity of a company, purposely not disclosing risky investments, overstating sales revenue and understating expenses are all forms of accounting frauds. 

Internet Fraud

This is the most common type of fraud. With a few clicks of a mouse, scammers can reach tens of thousands of people by building a website or even publish online newsletters to steer certain stocks. Misleading information and fabricated positive reviews of an inflated price of stock lead the victim to purchase it. To manipulate the market, Investment companies and individual brokers use internet board rooms where they offer deceptive information to potential investors. 

It is important to always verify all advice related to investment from sources that are not known to you. It can even be checked from offline sources. Investors must be aware of the fact that almost anyone can make a fake business look established for very little cost online. 

How To Reach Out For Help

Reach out for professional help as soon as possible. A securities fraud lawyer has a better chance of helping you get back your money the sooner you take action. They can assist you in filing a lawsuit to recover your investment losses.  A quick checklist below can help you regain your losses from the fraudsters and help you come out of this victorious:

  • Collect all the relevant information and make a file with as much data you have, Include contact details, registration number, office address, website link, email addresses, and any other details you have of the person who scammed you along with the bank statements for all the transactions made. In case you have made a police complaint, add that to the file too.  
  • Meet an attorney to understand your rights and learn more on how to protect yourself better. Report the case to court with the help of the securities fraud lawyer. 
  • If the fraudster has used the reference of a legitimate business or agency, make sure to contact them as well. Usually, such organizations are even unaware until their reputation is scarred by such people. 
  • If you have been a victim of an internet scam, it is good to make sure you have left reviews on general trading chat rooms and other places to warn off others who can be the next target of the scammers.
  • If you have given out your personal identification information then make sure to contact your credit card or any other financial institution that you are associated with to alert them. 
  • Follow up with the case and be persistent. Not all battles are won in a day. 

Coping with the aftermath of being a victim of investment fraud is difficult. Apart from financial losses, one can also be dealing with a painful array of emotions like anger and frustration. It’s important however to pull yourself together and take necessary action.

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