Security and Investment Fraud

Security and Investment Fraud Lawsuits and Legal Help in Somerset

When you entrust your hard-earned savings to a financial institution or expert, you expect two things: your money is safe, and it will grow over time. Transparency is vital. You deserve full disclosure about how your investments are handled, where your money is allocated, and the risks and rewards. Unfortunately, deceptive stockbrokers and investment advisors often abuse this trust. Their misconduct can lead to severe financial losses. Examples include unsuitable financial advice, outright fraud, and conflicts of interest. If you or a loved one are victims of security and investment fraud, seeking support from a skilled Somerset criminal lawyer is essential to safeguard your financial future.

At Logue Law Group, our extensive experience with securities and investment fraud enables us to help clients recover their losses. Our team of attorneys, including our Somerset DUI attorneys, is dedicated to delivering the justice you deserve.

Different Types of Security and Investment Fraud

Investment fraud involves numerous unethical behaviors by brokers, all of which can severely impact your finances. Here’s a breakdown of the most common forms of security and investment fraud.

Bond Fraud

Bonds are a financial tool often touted as a reliable, low-risk investment ideal for fixed-income investors. These instruments allow companies or governments to raise capital by borrowing from investors. However, fraudulent practices in bond trading can lead to catastrophic portfolio losses. For example, during past economic recessions, many investors fell prey to bond scams, wiping out their life savings and retirement funds.

Breach of Fiduciary Duty

Brokers play a critical role as intermediaries between buyers and sellers in various fields such as real estate, insurance, securities, and commodities. Legally, brokers must act in their clients’ best interests by providing unbiased advice. However, a failure to meet these fiduciary duties constitutes fraud, resulting in financial harm. If you’ve been the victim of such misconduct, consult a Somerset DUI attorney at Logue Law Group to begin the recovery process.

Churning and Excessive Trading

Churning occurs when a broker initiates excessive trades within your investment account solely to increase their commission, putting your financial stability at risk. If your broker is prioritizing their income over your financial well-being, this unethical action is considered fraudulent.

Failure to Supervise

Investment firms are responsible for implementing robust systems that supervise their financial advisors and brokers. These systems should maintain regular monitoring of portfolios and ensure trades align with a client’s goals and risk tolerance. Neglect in these duties often results in fraud. Advising investors to consult with a Somerset criminal lawyer is a critical step toward recovering losses associated with such negligence.

Types of Investment Fraud Schemes

Brokers are entrusted to work in your best interests, yet some take advantage of their clients for personal gain. Here are common examples of schemes to watch for:

• Non-Traded Real Estate Investment Trusts (REITs): These can lack liquidity, tying up investor funds for extended periods.
• High-Risk Junk Bonds: Promising high returns, these bonds carry significant risks of default, jeopardizing your money.
• Ponzi Schemes: These depend on funds from new investors to pay returns to earlier ones, creating an unsustainable cycle likely to collapse.
• Structured Notes: While these hybrid securities may seem appealing, they often come with complicated terms and hidden risks.
• Unsuitable Variable Annuities: Elderly investors may be coerced into purchasing risky annuity products poorly aligned with their financial needs.

Margin Trading

Margin trading involves purchasing stocks using borrowed money. It’s a high-risk tactic that allows brokers to earn significant commissions, even if the investor hasn’t fronted additional funds. Many fraudulent financial advisors fail to disclose the substantial risks involved, leaving their clients vulnerable to financial devastation.

Omissions or Misrepresentation

Your broker has a responsibility to explain all aspects of an investment, including its potential risks, terms, and clauses. If they fail to provide this information and the investment results in losses, it constitutes fraud.

Asset Overconcentration

Diversification is a fundamental principle of investing. A responsible broker takes into account factors like your age, financial status, and risk tolerance when making decisions. If they fail to diversify your assets and instead concentrate your investments in a narrow selection, they may have engaged in fraudulent behavior.

Preferred Securities

Preferred securities, often considered a safer investment during stable market periods, can behave like common stocks during a crisis. This unpredictability not only diminishes expected returns but also leaves investors exposed to potential losses.

REIT (Real Estate Investment Trust) Issues

REITs offer investors access to a diversified portfolio of real estate projects and distribute 90% of their returns as dividends. However, if brokers fail to meet their obligations and deliver promised returns, contacting a Somerset criminal lawyer is a necessary step to investigate and file a claim.

Selling Away

This form of fraud occurs when a broker endorses private securities that aren’t approved by their firm. The broker is accountable for such actions and can be held legally responsible by both the firm and the investor.

Unauthorized Trading

Unauthorized trading happens when a broker executes trades on a non-discretionary account without the client’s permission. Commonly associated with churning, this kind of misconduct aims to inflate broker commissions at the expense of the investor’s wealth.

Variable Annuity Issues

Brokers often market variable annuities as a secure retirement plan. Unfortunately, these products come with hidden high annual costs, sometimes exceeding 3%, alongside penalties for early liquidation. This is especially concerning for elderly or inexperienced investors. If you’ve faced significant losses with variable annuities, consulting with a Somerset DUI attorney can guide you in taking legal action.

Seek Help From a Somerset Criminal Lawyer Today

At Logue Law Group, our knowledgeable attorneys are committed to protecting your financial future. Whether your claim involves unauthorized trading, churning, or any other form of fraud, our team—including our expert Somerset DUI attorneys—offers legal counsel backed by years of experience. Contact us 844.PITT.DUI today for a free consultation to recover your losses and hold dishonest brokers accountable. Contact Logue Law Group Now!