Just about everywhere you turn these days, there is some kind scam going on. Sadly, investment scams are at an all-time high.
People want to invest money because they’d like to ultimately “make” money and be comfortable in retirement. Nice thought, and at one time, this was quite “doable.” Since the recession hit, those with investments have lost a lot of money, not their shirt – not yet – but it’s been a depressing ride for many. It’s hard not to understand why those who have lost funds would want to recoup them as fast as they can, any way they can – legitimately that is.
With that kind of investor mindset, it’s not much wonder there are scam and con artists out there that will set up schemes that are too good to be true and go trolling for unsuspecting investors. Unfortunately, even some pretty savvy people who do invest quite often get “had” by a scheme now and then. Of course, there are also the uninitiated investors who may be dabbling in the market and have an inkling of what they are doing, but not enough knowledge and intuition to spot a fraud when it raises its ugly head.
Here are a few things to be on the alert for if you are planning on doing some investing. If the rate of return on your investment is way too high – it sounds fantastic in fact – tone down your enthusiasm, because in cases like this it “is” too good to be true. The truth is that it is very rare for an investment to return more than twice the principle.
Keep in mind too that every investment must be audited and if this is not being done, your radar should go on high alert, prompting you to do some in-depth searching about the “opportunity of a lifetime.” Feeling rushed to fork over your cash? Being pressured to buy in or lose out? Back up a few steps and reconsider what you are doing. If the business offering the opportunity is legit and stable, they aren’t going to be out hustling customers and they won’t be using hard sell tactics either. This is when the word “No” should leave your lips promptly.
Sometimes all you have from the person who is trying to sell you something is their word about their firm or opportunity. Even though you may feel like its overkill to check out the firm’s rep and their investment offerings, do it anyway. The time you check may be the time you find out you should “not” invest your hard earned money.
If for some reason you got had by some smooth dude selling something that cleaned you out, speak to a qualified attorney with experience in this area of the law. You never know, you may be able to recover something.
Stock fraud these days seems to be almost as common as product recalls. People need to be wary about investing in stock without doing due diligence.
“Generally speaking, there are two kinds of people who want to venture into the world of investing. Those who have an optimistic point of view on investing (if all goes well) but remain skeptical in light of recent fraud cases, and those who are skeptical first and try to hang onto their sense of optimism that not everyone is out to scam you,” said Michael G. Smith, an Arkansas injury lawyer, practicing personal injury law and dealing with stock fraud cases in Little Rock Arkansas.
The most successful investors seem to have a certain internal radar about them that can spot a dud at fifty paces and the Bernie Madoffs of the world don’t get past their front door. “Having said that, it’s not easy to spot a fake, particularly when the fraudster is charming, personable, has a good reputation and an ‘image’ that projects confidence and trustworthiness. It’s those with the glib gab that get the furthest and make the biggest bucks in scamming people,” commented Smith.
Is it really possible to pull the wool over people’s eyes, take them for mega bucks and keep doing it for years? Yes, it is possible, and it’s possible because people have not done true due diligence in checking out the investment opportunity. They have relied instead on that illusive word of mouth from others and a person’s reputation. They have not checked into any details in any depth, and this is how people get ripped off.
“While people don’t like to question those that appear to be in the know, be successful and may even be a friend, it’s in their own best financial interests to check, check, check and check again,” added Smith, who has handled some interesting stock fraud cases in his years of practice. “You need to protect your ‘own’ interests first and if that means the person who is offering you a ‘great deal’ stops talking to you, you may just be better off,” he said.
Relying on mere trust without checking is precisely how Ponzi schemes get going and stay flourishing until the roof falls in one day. “Put another way, the person who unwittingly gets back his principal investment (from newer clients) as their ‘return on their investment’ just sets the person up to be a sitting duck who unintentionally may supply other victims to the scammer,” outlined Smith.
“Here’s one thing that you might want to watch out for if you’re planning on dealing with an independent investment advisor. First off find out if the advisor’s independent accounting firm is an obscure, ‘who in the heck knows who they are’ kind of firm,” recommended Smith.
If the investment advisor someone is working with keeps custody of client assets (money), that means they “must” have independent audits and unannounced audits by the SEC. If the advisor isn’t keeping the assets, but a group does, the client has statements to verify what is going on. In the Madoff case, the accounting firm was a “who in the heck are they” kind of firm. Red flag number one.
There are other areas to check as well, including the answers to the advisor’s ADV on the SEC site.
Analyze them carefully, because quite often there are clues sprinkled in the answers that will tip someone off that all is not as it appears to be. “When in doubt, speak to an attorney who handles cases like this and have them check the information out. It could save you a whole lot of economic grief,” stated Smith.
Learn more by visiting http://www.Arkansaslawhelp.com
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
While many people tend to think that investment fraud is all about stock and securities fraud, it actually has many other facets. Be alert to scams.
It’s likely that not many people have heard of invention scams or even rare item investment scams, but they exist and they are every bit as sneaky and underhanded as stock and securities fraud. Scams are on the rise, which makes sense in this dismal economy, and as a net result, millions of dollars is fleeced from customers every year.
To be on the alert and get wise to investment frauds/scams there is some warning flags that should go up that would hint that a person may be dealing with a potential scam. Of course, the first one is predicated on that old chestnut, “If it sounds too good to be true, then it likely is.”
Red flag number two would be a high-pressure sales person trying to use strong-arm tactics to get the potential investor to invest immediately if not sooner. If someone calls and starts a spiel about an investment opportunity when no one in the house requested information, it’s time to hang up. Some scam artists also have the nerve to ask for credit card information or even social security numbers. It goes without saying that this information needs to be kept close to the vest and not shared with anyone.
Although people are able to get fraud and scam information from the Federal Trade Commission and the state securities regulator, if common sense is utilized in a prudent manner, most scams of this nature may be avoided. On the other hand, if a scam was successful, and some of them are due to their very crafty believability, the victim needs to act fast to remedy the situation.
Don’t waste two seconds thinking that some fraudster took advantage of you and ripped off money or vital personal information. Just pick up the phone and call the police, the fraud has to be stopped in its tracks before someone else gets taken in. Give them as many details as possible about who called, how the contact was established, how any investments purchased were funded, and any information that might help. No detail is too small to mention.
The next person on the list to call would be a lawyer familiar with stock and investment fraud. It’s their job to assist in building a case against the person who perpetrated the fraud. It’s also their job to answer any questions about stock and investment fraud, how it works and what the chances are of recovering any money.
To learn more about Little Rock injury lawyer, Little Rock accident lawyer, Little Rock person injury lawyer,Little Rock malpractice lawyer, Little Rock injury attorney, Little Rock wrongful death attorney, visitArkansaslawhelp.com.
Getting into the stock market has the potential to be a rather risky affair if you don’t know what you are doing. And, even if you do, the area is often fraught with scams and schemes.
Anyone who has been around the stock market for a long time will have encountered high yield investment programs. Most often these seem to be found on the Internet. By definition, they are an investment in which the investor has the potential to garner a hefty return of their investment. Of course this sounds absolutely amazing and who would not want to make more money? However, most of these high yield investment programs are fraudulent.
Here are some tips so you will recognize a fake when you see one. The first thing you should watch for is the fact high returns are guaranteed. This should send up warning flags to you because no reputable fund manager worth his or her salt would ever guarantee a return on someone’s investment. They won’t guarantee a return because honest to goodness genuine investments just don’t work like that.
Traditionally, investments will fluctuate with the market. This is usual, but what is not usual is the ability of a fund manager to be able to predict the future for an investment. It solely depends on the market. If you’re told you will have a guaranteed fixed rate of return on an investment, run, don’t walk to the nearest door.
One of the other signs you should watch for relates to the investment’s risk levels. You need to ask pointed questions about the security of your investment, and if you get wishy-washy answers, think long and hard about what you are doing. Chances are you being mislead if they mention all investments are completely protected and safe. There is no such thing as complete protection and safety in an open, honest and fluctuating market place.
If mysterious funds backing these so-called safe and protected investments were so full of cash, just how much would they need if the fund collapsed? The investors would be out on the streets with nothing if this were the case. If you’re told there is no risk or can’t get a straight answer about the risks, take a pass.
Red flag number three is if you are asked to send your money directly to the professional with whom you are dealing. That’s a no-no in the real world of stock market buying, selling and trading. If this reminds you in the slightest of something called a “Ponzi scheme,” you’d be right on. So stay alert, be smart, ask questions and when in doubt, don’t proceed; and/or call a lawyer with experience in this area.
Michael G. Smith is a Little Rock injury lawyer and Little Rock accident lawyer, practicing personal injury law in Little Rock Arkansas. To learn more about Little Rock injury lawyer, Little Rock accident lawyer, Little Rock person injury lawyer, Little Rock malpractice lawyer, Little Rock injury attorney, Little Rock wrongful death attorney, visit Arkansaslawhelp.com.
Investment fraud by any other name is called brokerage fraud and it is a rather unique crime in which many attorneys do not specialize. If you have been a victim of this form of fraud, track down a highly qualified investment fraud attorney to handle your case.
Investment or brokerage fraud is usually the result of an advisor, a stockbroker or even the brokerage firm in question offering advice to a client that goes directly against the guidelines laid out by the Securities and Exchange Commission. Will you know if you have been scammed? Not necessarily, however there are some things for you to be on the lookout for when dealing with brokerage firms, etc.
A word of advice to older Americans who have sizeable savings accounts and are looking for places to invest – avoid deals that look too good to be true. Many unscrupulous investment brokers looking to pull a fast one on their clients will target seniors, as they have a tendency to be more trusting. It’s usually best if you do your investing directly with trusted banks and stay away from online trading schemes as well.
In you’re considering making an investment, then make it a point to hire a lawyer to read the fine print in the brokerage contracts. That is where fraudulent companies and brokers tuck the tricky legalese away, hoping you won’t understand what you are reading. Once that contract is signed it’s hard to do anything about it. So before you invest, consult with a highly skilled investment fraud attorney who has seen just about everything and knows what a genuine contract should say.
Generally speaking, the most common investment fraud scheme centers on Prime Bank Instruments. This is where the scammer throws around the names of some of the world’s most well known banks to get you to invest
your money. Here is how that scheme works: you will be told your money is pooled with other investors and you will likely get good returns to start with so that you invest more. The returns are really funds from other victims. This scheme usually folds quickly, leaving you holding an empty bag of money.
For this reason alone — the chances of brokerage investment fraud – take the time to thoroughly investigate any company in which you are considering investing. While this may seem like a pain, it will be worth it in the long run if you not only get to keep your initial investment, but also get a good rate of return on it legitimately.
Michael G. Smith is a Little Rock injury lawyer and Little Rock accident lawyer, practicing personal injury law in Little Rock Arkansas. To learn more about Little Rock injury lawyer, Little Rock accident lawyer, Little Rock person injury lawyer, Little Rock malpractice lawyer, Little Rock injury attorney, Little Rock wrongful death attorney visit Arkansaslawhelp.com.
One might wonder where on earth a term such as whistleblower originated. It actually hails from the practice of English bobbies who blew their piercing whistles when they saw a crime in progress. Everyone within seemingly two blocks knew something was up when they heard that sound.
Nowadays blowing the whistle on crime isn’t quite as colorful perhaps, but it may be just as effective. Most whistleblowers are in the category of internal early warning systems and expose wrongdoings within a company to another employee or someone higher up the management ladder. External whistleblowers usually report the suspect activity to whomever they think will best handle the situation – media, a watchdog organization, law enforcement or a lawyer.
This legislation is geared at federal employees and in order to lay a complaint under the auspices of the False Claims Act the worker must have reason to believe their employer has violated a law, regulation or rule. Or they must testify or initiate a lawsuit on the legally protected matter or refuse to break the law that they feel their employer is violating.
One interesting and little known twist when dealing with Whistleblower legislation is that if the information being disclosed is prohibited by law or an executive order, telling anyone this information may be considered to be an act of treason. Suffice it to say this charge has yet to be laid in Whistleblower cases.
The other thing that usually happens with Whistleblower cases is that if the government does collect from the defendant as the result of a successful fraud case, the person who blew the whistle on them shares in the proceeds of the settlement. Now you might be wondering who in their right mind would blow the whistle on something and then spend the rest of their life waiting for the retaliation.
Thankfully, when this legislation was drafted, an anti-retaliation provision was added that prohibits harassment or the firing of a whistleblower. This particular section will allow the person who spoke up and out to file a wrongful dismissal lawsuit and even seek double back pay along with any other requested damages.
If you are in a situation where you know something that needs to be told because it is wrong, morally, ethically and legally, contact a highly trained lawyer who specializes in this area of the law. That first phone call will be well worth it in the long run for more than just the possible financial compensation. The satisfaction of having made a difference is an experience in itself.
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