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Investing your money wisely is a critical step in ensuring your financial security. Many people put their money in the hands of investment brokers who have a better understanding of the complex landscape of financial markets. Unfortunately, there are bad actors among these brokers who defraud investors. If you lost money, a Fort Myers personal injury attorney may be able to help.
At Viles & Beckman, LLC, we have a long history of helping people recover compensation after falling victim to stockbroker fraud. We understand how the mismanagement of your funds can completely upend your life and will work tirelessly to set things right. Contact us today to schedule a free consultation with an investment fraud attorney from our firm.
When to Hire a Securities Fraud Lawyer in Fort Myers
If you lost significant money due to securities and investment fraud, you could be entitled to recover compensation from the liable party. Bad actors in these cases often include:
- Investment advisors
- Stockbrokers
- Brokerage firms
- Third parties
When the negligent or illegal actions of one of these parties lead to financial losses for an investor, it is within the rights of the investor to file a lawsuit. These types of fraud often result in losses in the thousands of dollars, and sometimes investors can even lose millions. Holding the liable party responsible is critical after a significant loss.
Investment fraud can take many forms, and it is not always immediately clear to an investor whether they have been defrauded or if they simply ran into some poor luck with their investments. Speaking with an experienced Fort Myers security fraud lawyer can help you determine whether or not you have a case.
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Types of Investment Fraud
There are many different types of investment fraud. Most of the time, investors are not sure of the type of fraud that resulted in their financial losses. A security law firm can help investigate your case to determine the type of fraud that was committed and who is responsible. Common types of investment fraud include:
- Unsuitability
- Unauthorized trading
- Misrepresentations or omissions of fact
- Churning
- Breach of fiduciary duty
- Over-concentration
- Failure to supervise
- Pyramid schemes
- Ponzi schemes
- Pump and dump schemes
Unsuitability
An investment broker must make recommendations and invest a client’s money in a manner that is suitable for the investor’s situation and risk level. If investments are made that are too high-risk or too conservative, the broker may be liable for any damages to the investor’s portfolio.
Unauthorized Trading
When handling the money of a client, stockbrokers must comply with their wishes. Making a transaction without consulting the client can result in the trader being liable for any losses sustained by the investor.
Misrepresentations or Omissions of Fact
Failure to disclose the risks of an investment or any conflicts of interest that the broker has with an investment of your money can open them up to liability for any resulting financial losses.
Churning
Churning is when a broker is making excessive trades with an investor’s money that do not benefit the client but instead simply generate additional commissions for the trader. Churning is prohibited by the Financial Industry Regulatory Authority (FINRA).
Breach of Fiduciary Duty
If an investment broker or financial advisor fails to act in the best interest of their client to whom they hold a fiduciary responsibility, they can be held liable for any losses sustained.
Over-Concentration
It is critical that a stockbroker does not over-concentrate the investment of their client in a single asset or sector of the market. If they do and there is a collapse in this asset or sector, they could be liable for any losses their client sustains.
Failure to Supervise
Brokerage firms are responsible for the actions of the brokers they employ. Part of this responsibility includes ensuring that the brokers act responsibly and in the best interests of their clients.
Pyramid Schemes
A pyramid scheme is an illegal business model in which people are recruited to invest their money in a business to sell a product that lacks genuine value or substance and to recruit additional investors. Companies or individuals running pyramid schemes risk serious criminal charges as well as having to pay restitution to their investors.
Ponzi Schemes
A Ponzi scheme is similar to a pyramid scheme, with investors being paid from money generated by new investors rather than from actual profits made by the company.
Pump and Dump Schemes
Pump and dump schemes are where investors are misled about a company to boost the price of the stock. Once the price has risen, the bad actors sell off all their shares flooding the market and causing the stock price to plummet.
The investment fraud cases above are only a fraction of the many forms that investment and securities fraud can take. If you feel you have been defrauded in any way, it is critical that you contact an experienced Fort Myers security fraud attorney.
(239) 334-3933
Most Investment Fraud Cases Are Resolved Through Arbitration
The majority of investment fraud cases are resolved through arbitration. A large part of the reason for this is that when you sign a contract with an investment firm, there is often a clause that states that all disputes will be resolved through arbitration. Arbitration in these cases will be regulated by FINRA.
An experienced investment fraud lawyer can help walk you through the arbitration process to ensure you recover the most money possible from the party responsible for your financial losses.
Click To ContactGet Help From an Experienced Security Fraud Attorney Today
When attempting to recover compensation after being defrauded out of your investment, it is critical that you hire an experienced attorney. At Viles & Beckman, LLC, we have a long history of helping our clients get the money they need and deserve.
If you or a loved one lost money because of investment fraud, contact us today to schedule a free consultation. There is no obligation to retain our services, so don’t hesitate to get started.
Call or text (239) 334-3933 or complete a Free Case Evaluation form
