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Securities Fraud Violations Come in Many Forms

“Securities Fraud” covers a wide range of illegal activities, all of which involve the deception of investors or the manipulation of financial markets. These securities fraud activities can include:

Accounting fraud is the illegal alteration of a company’s financial statements in order to manipulate a company’s apparent health or to hide profits or losses.

Overstating revenue, failing to record expenses, and misstating assets and liabilities are all ways to commit accounting fraud.

The objective of this fraud is to steal the advance fees you pay to participate in some larger objective.

For example, you might be asked to make a series of upfront payments for a bargain shipment of heating oil, coal, or some other commodity that ultimately never arrives.

Alternatively, you might be offered an interest-free loan from an off-shore bank if you pay an application fee in advance.

Regardless of the service or product promised, the formula is for you to pay an entrance fee now for something you’re supposed to receive later – but never arrives. The fee paid is the scam artist’s profit.

A boiler room is a scheme in which salespeople apply high-pressure sales tactics to persuade investors to purchase securities, including speculative and fraudulent securities.

Most boiler room salespersons contact potential investors through cold calls. Some notable boiler room tactics include making claims that cannot be easily verified by the investor, demanding immediate payment, or issuing threats for noncompliance.

To prevent unethical market practices, the United States government formed the Securities and Exchange Commission (SEC) in 1934. The SEC takes part in market surveillance to deter unlawful practices from occurring.

One of the SEC’s main priorities is to investigate insider trading. While certain types of insider trading are legal, it becomes illegal when “insiders” within a corporation, like corporate directors or major shareholders, trade securities in such a manner that violates their relationship of trust while also having material information unknown to the general public.

Mutual funds are investments that allow investors to pool their wealth and invest in a selection of stocks. Investors can choose from passively and actively managed mutual funds—passive mutual funds are often referred to as index funds.

Actively managed funds cost more and need to perform exceptionally well to generate a return for the investor. If properly managed, mutual funds can provide consistent returns. Mutual fund fraud, on the other hand, can result in investors paying significant, unnecessary fees.

Mutual funds are ripe for fraud because they sometimes come with exceptionally high commissions for brokers. Your broker may refer to this commission as a “transaction fee.”

Named after Charles Ponzi, a swindler from the 1920’s, these pyramid schemes promise high returns to lure investors. It uses the money from new investors to pay previous investors.

The large payments to early investors add credibility to the fraud, which convinces skeptics to invest and further fuels the fraud’s growth.

Little or no actual investing ever takes place, and the fraud blows up when regulators step in or an insufficient number of new investors enter to pay off existing investors.

Our Approach

Our Practices are Guided by Integrity. We’ll protect what you deserve.

We work tirelessly and fight tenaciously to hold rights abusers accountable.

If you’ve experienced a distressing incident related to an issue like this, call us for a free case evaluation.

Did You Know?

Clean Air Rights
You have a right to breathe clean air, free from exposure to pollutants or the harmful impacts of climate change
Water Contaminants
Water pollution and contamination sources include agricultural runoff, industrial waste dumping and disposal, underground waste storage leaching, and chemical and oil spills.
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Is It Illegal, or Just Unfair?

Legal cases can be lengthy, complicated, and confusing, but you don’t have to take on the system all by yourself. If you believe someone has violated your individual rights, or the rights of a large group of people in your community, we can help you find the right course of action.

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