Ponzi schemes usually involve the fraudulent party paying returns to investors from their own money or by subsequent investors, giving the illusion that a venture is profitable.
Even the most discerning of investors can be lured in by these unlawful schemes. Frequently, a broker, bank, or other financial institution breaches their duty by materially aiding the scheme. If you have lost your money, you need to get in touch with a Ponzi scheme attorney who has years of experience going after the liable parties for the money they stole and the third-party professionals who aid and abet or otherwise assist these schemes.
Silver Law Group has wide-ranging backgrounds in demonstrating bank and other financial institutions have liability for assisting these Ponzi schemes, and can use that background to determine the parties who may be held responsible for your losses.
One of the most notable red flags associated with a Ponzi scheme is that it often promises a guaranteed or very high rate of return, sometimes in a relatively short period of time. Ponzi schemers will often give investors limited-to-no visibility on how their venture works, making it overly complicated with various transactions or entity structures. It is possible that a bank may be used to obfuscate the truth.
Ponzi schemers may not have full and accurate documentation readily available, or it may contain errors or inconsistencies. The scheme is simply recycling people’s money, paying older investors with the capital provided by newer investors.
Investors may find that even though they receive consistent returns, the operator of the scheme makes it difficult or impossible to withdraw substantial funds. If you are worried that you may have been caught up in a Ponzi scheme, you are not alone. It is possible, in many cases, to recover money lost in a Ponzi scheme, including from banks and financial institutions who knowingly or unknowingly enabled the fraud.
When a Ponzi scheme is revealed, it may feel as though a lifetime of hard work has evaporated with your investment, especially if the primary individual has spent the money already. However, there are numerous potential routes to collecting damages, including pursuing claims against third-party professionals who participated in the scheme.
Even if the direct perpetrator of the fraud does not have funds available for victims to recover their funds, parties like banks and financial institutions that participated in the scheme may be considered legally liable. The financial entity may have played a role in the Ponzi scheme, they may be found liable for aiding and abetting fraud, or for aiding and abetting breach of their fiduciary duty, to name a few possible grounds for recovery of damages.
Moreover, entities such as brokerage firms are regulated by the Financial Industry Regulatory Authority (FINRA). This means that victims of Ponzi schemes seeking damages may fall under mandatory arbitration by a FINRA panel. An investment fraud attorney can review your options to seek compensation through FINRA arbitration, a civil litigation, or even through a class action.
If you recognize the red flags of a Ponzi scheme, an attorney at Silver Law Group can give you more information about your rights in reclaiming your losses. We assist clients from all over the country who have been impacted by bank and financial institution liability in Ponzi schemes.
Our attorneys represent individual investors, small businesses, and institutional investors who have been harmed by Ponzi schemes. We know how fraudsters operate and can step in to hold the financial institutions accountable for their failure to stop unlawful behavior. Contact us today to learn if a claim against a financial institution is possible.
