beware of fraudulent investments related to COVID-19

Beware of Fraudulent Investments related to COVID-19

Apr 20, 2020

The Commodity Futures Trading Commission (“CFTC”) has recently issued a warning to investors to be on the lookout for scams seeking to take advantage of recent COVID-19 related market volatility. The Securities and Exchange Commission (“SEC”) has also issued a recent warning to investors to be especially vigilant in investing in microcap stocks where brokers or promoters claim that a company’s products or services can help stop the coronavirus.   According to the SEC, fraudsters often use the latest news developments to lure investors into scams. There have been a number of recent Internet promotions, including on social media, claiming that the products or services of publicly-traded companies can prevent, detect, or cure coronavirus and that the stock of these companies will dramatically increase in value as a result. The promotions often take the form of so-called “research reports” and make predictions of a specific “target price.” The SEC urges investors to be wary of these promotions and to be aware of the substantial potential for fraud at this time When it comes to options investing, recent market volatility may cause fraudsters to try to promote options or futures strategies to take advantage of this market. This too has special risks which investors should be aware of. It is true that some types of options do allow traders to hedge against market risk. For example, historically, gold futures and other precious metals have seen short-term increases in times of economic uncertainty. And, over-the-counter digital asset or foreign exchange (forex) traders may be able to identify pairings that go up in value when other markets are in decline.  However, the CFTC warns that there is no such thing as a risk-free strategy, and no person or program can guarantee future results. Also, you should know that all risks, fees, and expenses should be disclosed to the investor upfront.  According to the CFTC, here are things you should look out for: If it Looks to Good to Be True, It Probably is Trading and investing come with a number of biases and emotions that influence decision making. Recent market losses due to the impact of COVID-19 may motivate some traders to recoup losses, while others may seek safety. Fraudsters know this and design their pitches to appeal to these instincts. Examples include claims of special insider knowledge or insights, promises of unusually large returns, guarantees, surefire trading signals, or low costs to open accounts. And these offers are timed to hit your inbox or social media feed when you are most interested. The common advice is “if it looks too good to be true, it probably is.” But frauds are often successful because they do look good. The problem, even for experienced traders, is that when biases get in the way, they make it difficult to recognize what’s too good.  Experienced Investors Can Often be Scammed Numerous studies have revealed that those who are more financially literate and experienced are more likely to be victimized by investment fraud. It could be correlation: Those who are more financially literate are more likely to trade and therefore more likely to encounter fraud. Or, as some researchers […]

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Investment Fraud lawyer

What Does an Investment Fraud Lawyer Do?

Jan 6, 2020

An investment fraud lawyer fills a very important role for someone who has been scammed by a securities broker – the investment fraud lawyer levels the playing field and fights for you. The “fights for you” part is a given – lawyers should always zealously represent their clients. However, there is something extra. The investment fraud lawyer also “levels the playing field.” Let’s discuss that in more detail.   Investment Fraud Lawyers Level the Playing Field In a nutshell, leveling the playing field means that not only will an investment fraud lawyer advocate on your behalf, but he or she will bring specialized knowledge to bear in your case. When you believe that your money was taken from you unfairly or through deception, a good investment fraud lawyer will capitalize on his or her particularized knowledge and experience in securities law to ensure that you make your case effectively and persuasively. Accordingly, we will devote this blog to discussing the kinds of things that are specific to investment fraud lawyers that you may not know. We will go into detail about what exactly “leveling the playing field” means in the context of securities disputes. In so doing, we hope that you will be better able to understand the value of what an investment fraud lawyer brings to the table.   If, after reading this article you want to learn more about whether you need an investment fraud lawyer for your current situation, then we invite you to contact us today on our online contact form, or by calling 888-768-2499. We are the investment fraud lawyers who will level the playing field for you.    1. Knowledge of the Law The first thing that an investment fraud lawyer will provide to level the playing field is an extensive knowledge of securities law.   Today, there are many specialties in the law ranging from estate planning attorneys to social security disability lawyers. Indeed, there are fewer and fewer “general practice” attorneys because each area of the law is so sophisticated. One person cannot be expected to know all the intricacies of every legal specialty. (That is why you would probably not be well served to have your brother-in-law, who is a criminal defense attorney, draft your last will and testament.)   Accordingly, when you hire the help of an investment fraud lawyer, you are getting someone who understands all the ins and outs of the federal (and, if any, state) securities laws that set the parameters for investment and securities brokers. That kind of knowledge is vital to mounting a case against an unscrupulous investment broker. Remember, any broker whom you challenge will most certainly have an experienced lawyer on his or her side. Be sure that you can match the other side by hiring an experienced investment fraud lawyer.  2. Knowledge of the Process Also in the interest of leveling the playing field, investment fraud lawyers know the process of moving an investment fraud case through the appropriate court or arbitration forum. Almost more important than knowing the law is knowing what papers to draft and file, and when to file them.   With any type […]

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