Stock Fraud at an All Time High

It should come as no surprise that stock fraud is sky high during a recession. The question is what to do about it.

The figures for stock fraud for 2009 have just been released by the Financial Industry Regulatory Authority Office of Dispute Resolution (FINRA). Long name and an even longer report that features some rather dismal news. The report reveals the results of customer driven investment arbitrations against stockbrokers and investment firms.

It seems that the arbitration cases have increased on the order of 43% from 4,982 cases in 2008 to over 7,137 in 2009. Large jump and not a welcome one for those on the receiving end of fraud. While this should likely not be too shocking, it is shocking in ways that go to the core of our beliefs in honesty in others, especially during a recession when times are tough. Here is the interesting thing though, that can be taken with a bit of a grain of salt. The number of fraud cases was actually predicted to exceed 10,000 for 2009. The fact that it came in at 7,137 is somewhat mollifying, but not by much.

Perhaps the increases in securities prices for the calendar year 2009 cut down the number of claims that otherwise would likely have been filed last year. Whatever the reasons, the bottom line is that stock fraud is up and investment money down. Not a good combination when people invest expecting to actually make a return on that investment.

Many of the arbitration claims deal with omissions and misrepresentations and are coming in a close second when it comes to selling unsuitable investments. Some of the preferred securities sold on a fraudulent basis in 2009 involved bond funds, structured products and near cash instruments. The plot thickens as time marches on. Unfortunately, there are a large number of people – not familiar with investing – that have walked into something they thought was a “good deal” and it backfired on them and wiped them out financially.

Sadly, many of the arbitration hearings didn’t result in a good outcome for the complainant. The figures show that ripped off investors only prevailed about 43% of the time. That’s less than a half chance of succeeding in recouping an investment; slightly better odds than playing Russian Roulette but not by much.

If stock fraud is suspected in dealing with a broker or brokerage firm, call a seasoned lawyer with a background in this area. Once the case reaches the courts, the chances for investment recovery may increase substantially.

Learn more by visiting http://www.Arkansaslawhelp.com

Michael G. Smith is an Arkansas injury lawyer and Arkansas accident lawyer, practicing personal injury law in Arkansas. Learn more by visiting http://www.Arkansaslawhelp.com

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