Notes

In my role as FINRA's Defense Lawyer, I have seen quite a few investor fraud cases over the years. Many of these were securities fraud cases where the alleged perpetrator failed to maintain proper documentation or he/she failed to provide proper disclosure forms. Sometimes investors will attempt to defraud the regulatory agencies such as FINRA through non-traditional means such as offering unregistered prospects without first meeting the requirements. This is a form of fraud that can have serious consequences for investors who take part in these schemes.
As an investor adviser, your duty is to act in your clients' best interests at all times. If you are failing to do so, you are engaging in conduct which puts your own financial interests at risk as well as the interests of your clients. Even Breach and dedicated firms can make costly mistakes if they are not held accountable for their actions.

There are multiple legal issues involved when it comes to investors engaging in securities fraud. One of the most common is the creation of accounts in your name, which is considered a mortgage. Many investors will create this false impression that the funds invested are secure, when in reality there is no collateral behind the account. Others will misrepresent the nature of the investment they are making by misinforming clients about the type of security involved and the amount of cash that can be accessed. This is a legal issue that can have severe financial consequences for investors who are guilty of these kinds of actions. As always, you should consult with a qualified attorney before proceeding with any investment issues.

Another common illegal practice is trading on margin. Some investors will engage in short selling or "leverage" which is a clear violation of securities laws. Strict liability is another important consideration to look out for when dealing with investors who may be guilty of fraud. For example, when an investor breaks the law by providing false information to investors in order to gain a profit, they could face serious legal sanctions. This is why it is essential for you to hire a skilled and experienced attorney to handle your investment matters.

There are other potential legal issues with regard to fiduciary duty for investors. For example, when an investor fails to act in the best interest of their business, this can result in damages being awarded to the injured party. In some cases, insurance companies have been found to be guilty of securities fraud, even when they act in the best interests of the investor. When this happens, investors can actually receive compensation even when the company does not suffer any financial harm. Again, it is important for you to retain an attorney that is experienced with this type of law for your own protection.

One of the other legal issues that you should be aware of regarding fiduciary duty for investors is the statute of frauds. This refers to any illegal action taken in order to benefit oneself, such as the trading of stocks, or other investments. Although many investors try to stick to the letter of the law, there is always room for interpretation and future issues can arise. Therefore, it is important for you to engage a qualified attorney if you believe that you have been a victim of securities fraud.
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