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Investment Fraud: What It Is and How to Avoid It

Investment fraud, also known as securities fraud and stock fraud, occurs when a financial advisor gains an investor’s trust and abuses that trust by making false statements or omitting material statements of fact in order to cause the investor to buy or sell a security, and the investor loses money as a result.  Investment fraud victims are often over age 50.

Bernard Madoff and Affinity Fraud
On December 11, 2008, the Securities and Exchange Commission charged Bernard Madoff, the former NASDAQ Chairman, with fraud.  This may be the largest investor fraud ever committed by a single person.  Madoff admitted to defrauding investors of up to $50 billion in a Ponzi scheme, according to prosecutors.  In a Ponzi or pyramid scheme, new investor money is used to pay earlier investors to give the illusion that the investment strategy is successful.  When the flow of new money stops, the scheme fails.  Madoff allegedly told his sons that his investments were “one big lie”.  He confessed after he realized he would not be able to come up with money to satisfy requests from clients to withdraw funds. Read more...

Stockbroker Employment in a Shrinking Market

The employment market for stockbrokers changed dramatically in the past year.  Bank of America bought Merrill Lynch.  Morgan Stanley bought Smith Barney.  Wells Fargo bought Wachovia which bought A.G. Edwards.  JP Morgan bought Bear Stearns and Lehman Brothers is in bankruptcy.  These drastic changes have forced financial advisors to consider whether they should stay at a merged firm, in a radically different work environment, or investigate opportunities elsewhere.  If you are a broker, you may be unhappy with a new manager or find that products and services offered by your new firm don’t suit your business. Read more...

Do I Have a Case against My Stockbroker?

You lost a lot of money that you invested with your broker and you believe he or she is responsible and should return your lost money.  You may be asking yourself if you have a strong case against your broker or the brokerage firm.  What should you do?

First gather all documents you have from the broker, like new account documents, account statements, trade confirmations, sales literature and correspondence, including e-mails.  Then review these documents to identify how much you lost, in which investments you lost money and over what period of time.  If you believe the broker is responsible, you must identify what the broker did wrong, and how much of the loss was caused by the broker’s conduct.

To recover money from the broker or firm, you must be able to show that you lost money and the broker caused the loss.  It is not enough to show that you lost money.  Many people lost money when the market went down.  You must show that misconduct by the broker caused your loss. Read more...

Don’t Be a Victim of Investment Fraud

Research findings from the Financial Industry Regulatory Authority and the AARP might surprise you. The typical investment scam victim is a married man in his late 50s with better than average understanding of financial markets and strong confidence in his judgment. Victims of investment fraud tend to be better educated than non-victims, have higher incomes and have been investing for ten years or more.

How does this happen? Con artists are great at listening carefully to victims and then telling them what they want to hear. Scam artists act to control the conversation, speak excitedly, and suggest they can deliver high returns. Men are generally more susceptible to this, while women tend to be more cautious and ask too many questions. Read more...

Strength from Experience

Whether you need pre-conflict advice or assistance with a securities dispute, attorney Douglas Stone has the wisdom and securities industry knowledge necessary to provide sound legal advice.  His more than 20 years of experience in the securities industry as a lawyer and as a broker have given Mr. Stone a unique perspective few other attorneys can offer.  Westchester Securities attorney Mr. Stone has tried arbitrations before FINRA, the National Association of Securities Dealers (NASD), and the New York Stock Exchange in cities throughout the United States and represents parties in New York and Connecticut courts.

Contact our New Rochelle office today to arrange a consultation with Mr. Stone about your securities dispute. Call us to resolve your securities arbitration case at 866-720-3754.