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If you want to speak with someone immediately, please call our client-intake specialist, Ken Cooper, at (856) 308-5426.

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Stock and Investment Fraud

With the uncovering of each new case of investment fraud, it becomes clear that the risk of investors suffering significant financial losses are growing. Take for instance the latest scandal affecting the mortgage markets. These problems have been covered up for years and only now are coming to light. This latest scandal, like all previous scandals, are the result of greed or outright fraudulent acts on the part of very sophisticated people who prey on the lack of knowledge and the trust of hard-working employees and investors.

Much of the fraud results from downright unethical practices of investment advisors and money managers. Between the outright fraud of sophisticated manipulators, and the incompetent and unethical behavior of supposedly accomplished investment managers and hucksters, the investment world a dangerous place ripe with pitfalls and corruption.

If you have reason to believe that you or someone you know has been the victim of investment fraud, or simply incompetent advice, it is important to act immediately. If you wait too long, you may lose your rights, in some circumstances as quickly as one year from the loss. In other cases you may have up to six years.

Don't take a foolish chance. Contact us and talk directly to a skilled attorney who will review your facts and inform you of your rights under the law and the chances of recovering funds lost to fraud or simply incompetence.

Main types of investment fraud claims

Investment advisors, financial planners, stockbrokers, even life insurance companies and agents have devised many methods of defrauding consumers, due in large part to the lucrative nature of such scams. These practices deliver big payoffs and provide plenty of incentive to bend the law, and even break it, which is why consumers should be aware of the numerous types of investment fraud. Here are the most common:

  • "Never say sell!" - Some investment advisers, financial planners, stockbrokers, even life insurance agents rarely if ever advise you to stay out of the market. They always want you to buy, buy, buy. Occasionally they may advise you to hold, but you will rarely ever hear your broker to advise you to stay away from the market. The reason is obvious. If you stay away, he doesn't make a dime. Frankly, after he has you invested he doesn't make anything at all. That is why you probably hear nothing at all from your broker after he has your money.

    In truth, sometimes the best advice is to sell. But, if you sell, you take money away from your broker, money he may never get back. So, the broker's mantra is "Never say sell." If you broker's mantra is "never say sell" then it is likely you have a broker more interested in his profits than yours. Therefore, if you lost money (he certainly doesn't lose anything when you lose) then you may have been the victim of incompetent advice or even fraud for which you may be eligible for compensation.

  • Poor investment insights - every broker has a basic, core obligation to make investment recommendations that are right for their clients. To intentionally provide advice that conflicts with a client's needs, wants or goals, may be a manifestation of investment fraud.

  • Failure to provide the facts - a broker is also charged with providing all of the important and necessary information to a client about a particular investment decision. Neglecting to include data, no matter how insignificant, taints the business relationship between broker and client, and leaves the consumer at a disadvantage. Federal and state laws are very clear in this area, asserting that a broker must be forthcoming with the truth and fact-based support.

  • Investing without permission - it may seem like an assumed condition, but brokers are bound by law to make trades and other important investment decisions only with the permission of the consumer. Using a client's funds without consent is a flagrant violation of good business ethics and a clear case of investment fraud.

  • Portfolio mismanagement - if a broker fails to diversify a client's funds and sinks a large amount of money into one type of investment, dramatically increasing the risk of loss, the broker may be violating the consumer's legal rights.

  • "Churning" - term used to describe a broker's excessive trading habits, which is usually a tactic employed to benefit the broker, rather than the investor. Churning places the burden of proof on the consumer, who must illustrate that the broker was in fact making an excessive amount of trades.

Filing a claim

If you are a victim of investment fraud, you may want to seek compensation for your financial losses. State and federal laws, however, implement a statute of limitations, which provides consumers with a window of time in which to file a lawsuit after the investment fraud incident occurred. If you do not act promptly, you may be at risk of forfeiting your legal rights.

In many instances of investment fraud, a group of people with similar complaints can come together and form a consumer fraud class action lawsuit, a joint, collective effort to recover damages.

How do I get started?

Please fill out the Free Case Evaluation form on the top left side of this page and we will respond within 24 hours. If you wish to speak with someone immediately, call our client-intake specialist, Ken Cooper, at (856) 308-5426.

Disclaimer: While the use of this website does not form or imply an attorney/client relationship, we will treat all personal information with the strictest confidentiality and will never disclose it to anyone.


Free Case Evaluation

Are you a victim of stock fraud? Submit your complaint to one of our New Jersey attorneys for a free case evaluation by filling out the form below.

If you want to speak with someone immediately, please call our client-intake specialist, Ken Cooper, at (856) 308-5426.

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