5 Red Flags of Investment Fraud

Warning Signs for Investors Nationwide

Investors often put a great deal of trust in the financial advisors and stockbrokers they work with. Relying on their information, they invest some or all of their money into stocks, bonds, and other securities. Unfortunately, investors can be taken advantage of or become the victim of investment fraud in a matter of moments. It is important to know the red flags or warning signs of fraud to protect your investment.

At Dimond Kaplan & Rothstein, P.A., we represent investors nationwide who have sustained financial losses as a result of investment fraud. Our lawyers will help you understand your rights, including your right to compensation in the event you suffer damages as a result of the fraud. Contact our office today to schedule your free case evaluation with an experienced member of our legal team. 

Here are 5 red flags of investment fraud:

  1. Unregistered Securities or Persons

You should always work with a registered professional when making investments. You can check to see if a broker is registered through BrokerCheck by FINRA (Financial Industry Regulatory Authority). You can verify an investment adviser’s registration through the U.S. Securities and Exchange Commission (SEC). These websites will also tell you whether an individual has had customer complaints filed against them or has had their license suspended or revoked.

In addition to staying away from unregistered persons, you should also avoid unregistered securities. Unlicensed individuals may be more likely to attempt to sell you unregistered securities. Make sure to do your due diligence and ensure that the people you are working with and the securities you invest in are legitimate. 

  1. Promises of High Returns or Guarantees

Be wary of any financial professional who makes guarantees or promises of high returns. If it sounds too good to be true, it probably is. All investments have some degree of risk, so any marketing of a risk-free opportunity should be approached with caution. 

  1. High Pressure to Buy

You should never feel forced into investing in a security or other asset. High-pressure sales tactics demanding that you act now should be thoroughly investigated. Another common strategy used by bad actors includes claiming that “everyone is buying it.”

  1. Strategies That Are Overly Complex

You should always understand the investment or investment strategy. If the strategy is overly complex, you may want to seek other opportunities. You need to be sure that you understand what the underlying security is as well as any risk that is involved.

  1. Unsolicited Offers

Finally, be cautious about investing in any unsolicited offer that you receive. Do not give out your personal information to someone who cold-called you, as it may be a fraudulent scheme. 

Contact Our Office to Schedule a Free Case Evaluation

Were you the victim of investment fraud? Contact our office to schedule a free case evaluation. Our lawyers can help guide you through the legal process and work to determine whether you are eligible for compensation. There are no fees unless we win. We proudly represent clients across the country.

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