Securities fraud is also known as stock fraud for investment fraud. In a nutshell, this scheme knowingly invites investors to purchase or sell on the foundations of incorrect information. More often than not the result is loss. Securities fraud can also be when an investor embezzles or manipulates stock or even gives miss information to the public about the financial reports and audits. Other illegal acts from the trading floor are inside your training, front running, Ponzi schemes and downright theft.
Who is the target?
Investors that do not efficiently evaluate the risk of the investment are usually the ones that fall prey to these deceptive practices. When an investor is so desperate he can usually not afford to lose capital and want to deal looks too good to be true he may take the risk. But the truth is, if something seems too good to be true, it usually is.
What are some real life examples of securities fraud?
Although the company may not admit to purposeful misconduct, the following examples are still counted as securities fraud.
Bank of America admitted to not informing investors about uncertainties of future income during the financial crisis in 2014. They settled and paid a $20 million penalty.
In the same year, Morgan Stanley’s firm was charged with deceiving investors about the status of mortgage loans that the firm head under wrote, sponsored and issued. The firm again agreed to settle and paid $275 million that was returned to the investors.
In 2015, the Deutsche bank AG misrepresented the financial reports. The settlement made them pay $55 million in penalties misrepresented the financial reports. The settlement made them pay $55 million in penalty fees.
Unfortunately not all schemes can be uncovered. However, the FBI and the SEC worked tirelessly on the pending 1640 securities and commodities fraud cases that are pending in order to protect investors from misconduct and illegal activity.
What to do if I am a victim of securities fraud?
Your first step would be to attain the services of a securities fraud lawyer. This is no light matter and should be dealt with as such. If you were physically injured by a company you would have no problem retaining personal injury lawyers so you should not hesitate to hire a securities fraud lawyer to deal with your financial injuries.
You have trusted an investment firm to take care of and potentially grow your money and in doing that you should receive nothing less than truthful, professional and correct information. However, this company never intended to be honest with you unfortunately. Securities fraud lawyer will be able to advise you on the steps necessary to press charges. They will analyze your portfolio and figure out what exactly your losses are.
How long can a lawsuit like this take?
These cases can take a while to resolve. Even a good securities fraud lawyer rarely is able to settle in less than a year. More often than not the case as will take anywhere from 2 to 4 years. If the case is appealed by the company it can last more than six years.
Will I ever get my money back?
This really depends on if you win the case. The Securities and Exchange Commission is able to look into a number of remedies but unfortunately cannot guarantee that the money will be repaid in full. The Department of Justice is the only one that has the authority to press for criminal consequences like imprisonment but the SEC will do everything it can to help you financially.
How do I avoid being a victim?
Overall falling prey to some sort of fraud is definitely something you want to avoid. Here’s how:
- Keeping a business attorney or even a stockbroker fraud lawyer on retainer to help you before making an investment is a good idea especially if you were not very good at evaluating risk factors.
- Be wary, be careful and be watchful.
- You want to protect your investments and at least at first, only invest in stocks that have a very low risk factor.
- Keep up on the stock market and changing knowledge.