We know that securities fraud might seem like a big topic that can be difficult to navigate. However, that should...
If you’re someone who has lost a lot of money on an investment, you may be wondering if some aspect of foul play was involved. Unfortunately, securities fraud does occur, and multiple parties might hold some responsibility for it. Silver Law Group has provided some basic information on how investors might realize they were defrauded, what legal options they have, and what exactly qualifies as fraud.
The first red flag that causes investors to realize something is wrong is frequently when they see a substantial drop in portfolio value, but do not know what caused that drop, especially if it was due to misconduct by the company or certain third-parties. Other red flags may include money that was supposed to come from the company but the collateral no longer seems to exist; many company insiders suddenly leaving; accountants claiming that the securities were never actually purchased; and a host of other factors. Some people might not even be aware until a news report publicizes what happened.
If you are concerned that you have been defrauded, there are generally three avenues of recovery, all of which should be pursued through civil litigation.
The Securities Exchange Commission’s (SEC) job is generally to oversee the financial markets and to punish misconduct, but does a very poor job of recovering and returning money to defrauded investors. Second, the SEC created a whistleblower program where somebody aware of original, substantial findings of fraud or misconduct can file a claim with the SEC whistleblower office through legal counsel; and if the SEC recovers over a million dollars, they could potentially recover up to a 30% of all monies recovered as a whistleblower award.
The final avenue is frequently through a class action lawsuit, which is the bulk of this website’s focus. Most cases turn on class action litigation against the companies, officers, directors, financial advisors, and other third-party professionals who aided and abetted in the misconduct. We manage these class actions and represent clients in trying to recover their investment losses from third-parties who were in some way liable.
Federal securities laws require disclosure of the material aspects of the business. It does not require that a company have a track record of success in the past or otherwise. Investors are frequently frustrated to find out that their financial advisor was recommending investments that actually had significant red flags attached to them, and that the risks were substantially greater than what was being disclosed to them by the people selling the investments.
That is why you count on professionals who have the skill and due diligence to analyze many records and determine whether it makes logical sense to invest. Think of it like getting a medication prescription from your doctor: you hope that he has a better understanding than you do about all the pros and cons of the medicine, to determine whether it is a good idea to take it. If you just read the risk disclosures that came on the warning label, people would be unlikely to take anything.
When investing in the markets, people rely on the professionals to help them decipher the risk-reward analysis. Not every investment will yield positive results, but you may be able to file a claim against one of these professionals if they failed to disclose certain information, made an unsuitable recommendation, or alert you about illicit activities.
Whether you lost your investments in a Ponzi scheme, or there was an accountant, lawyer, or financial institution that aided and abetted the fraud, we can help. If you believe you were affected by securities fraud, Silver Law Group can discuss the possibility of class action litigation. Please contact us to learn what you should do next.
Fill out the contact form or call us at (800) 975-4345 to schedule your free consultation.