Investments That Are Too Good To Be True, Probably Are: Here Are 4 Ways To Tell

Feb 17, 2020

Working with an investment broker is the same as going to the auto shop to get your car fixed. Now, you might be wondering: How on earth is an auto mechanic at all like an investment broker? Well, it all comes down to trust.    Investing with Someone Is a Matter of Trust Think about it. Most people don’t know a thing about the inner workings of a car, and the more computerized cars become, the harder it is to know how to fix something with your car yourself. You are essentially at the mercy of the auto mechanic who works with cars on a daily basis. Indeed, when you go to pay your bill after the mechanic fixed whatever funny noise your car was making, it is likely that the mechanic will describe the problem using names of car parts that are alien to you. In sum, you are trusting your mechanic to have fixed the problem and not padded your bill with unnecessary costs.   That is the same experience most people have with investment brokers. You are not an expert in investments (if you were, you would be doing your own investing). Yet, the details of the stock market, and the various investment instruments out there can get confusing pretty quickly. So, you trust your investment broker to put your money in investments that will result in reasonably safe returns. Just like with the auto mechanic, there are plenty of unknowns. Thus, there is a level of faith that you put in your investment broker.   The problem comes when the investment broker, or your auto mechanic, is dishonest  and betrays that trust. With cars, the only real way to know whether the mechanic has betrayed your trust is if the car breaks down. By contrast, there are some “red flags” that will tell you ahead of time if an investment option, or offer, is something you should avoid.   In this article, we will talk about 4 ways to know that an investment is too good to be true, and therefore, should be avoided. If, after reading this blog, you would like to learn a little more about getting an investment fraud attorney to help you with your situation, we welcome you to call former Wall Street attorney Attorney Melanie Cherdack.   Investment fraud attorney Melanie Cherdack understands the plight of those who were victims of investment fraud. Because she has represented the investment side as a former Wall Street attorney, she has “seen it all” when it comes to the schemes that investment brokers use to defraud their clients. Contact us today on our online contact form, or by calling 888-768-2499. We are the investment fraud attorneys who will level the playing field for you.     There is Always a Little Risk, But Know the Red Flags We all know that investing always involves some risk. But you must understand that risk and it must be disclosed to you. That said, when something seems too good to be true, then you should follow your instincts and avoid it.   Here are a few tell-tale signs that an investment broker does not have […]

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investment fraud

How to Recover Losses from Investment Fraud?

Dec 9, 2019

Investment fraud can be hard to detect, and once detected can reveal significant financial losses to you. That is what makes investment fraud so insidious. The wrongdoing is not always obvious, and the results can be substantial. Indeed, investment fraud can come in various forms that are not always easy to recognize when you are a victim. While there is outright fraud such as non-existent investments or strategies, fake investments, and Ponzi schemes, there are also things that look like legitimate investments that are also types of investment fraud. Those include: Misrepresentations or Omissions. Fraud may occur when an investment client is not fully and fairly informed about the major aspects of an investment strategy or a particular investment. Churning. It can be fraud for a financial advisor to engage in transactions, trades, or other account activity simply to generate more commissions. Unauthorized Trades. An advisor may be guilty of fraud if he or she uses discretion without a client’s permission in order to engage in trades that are not approved by the client. Inappropriate Investments. A finding of fraud is possible when an advisor suggests or agrees to an investment strategy that is not proper based on the client’s age, financial situation, or risk tolerance.   Once you learn that you are a victim of fraud, however, the next question is whether you are able to recover those losses based on the fraud.   In this article, we will discuss one way in which you can recover some of those losses that are the result of investment fraud. Of course, if you have additional questions about your own circumstances after reading this article, we welcome you to contact us today on our online contact form, or by calling 1-888-768-2499. We are the investment fraud lawyers who can help you.    FINRA Arbitration As a general rule, if you are a customer of a FINRA member brokerage firm (most well-known firms are FINRA members) you are required to arbitrate your claim before the Financial Industry Regulatory Authority, or FINRA.  What is FINRA?  FINRA is a self-regulatory organization that regulates broker-dealers in the United States.The mission of FINRA is to: Provide investors with basic protections;  Ensure that securities sellers are tested, qualified, and licensed;  See that securities advertisements are truthful and not misleading; and  Make sure that securities products sold to an investor are suitable for that investor.   Who is Eligible for a FINRA Arbitration? With regard to FINRA arbitration, FINRA provides a forum to arbitrate matters at a relatively low cost for customers of member brokerage firms who have been wronged. To be eligible for a FINRA arbitration, the case must involve an investor and an individual or entity registered with FINRA, and the occurrence or event giving rise to the claim must have happened within the last six years. This occurrence or event does not mean the date of purchase but may be actions such as actively concealing the fraud, continued misrepresentations or continued purchases, or misstatements of value on monthly statements within the past six years. An investor must arbitrate at FINRA if there is a written agreement between investor and […]

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