What is Investment Fraud?

What is Investment Fraud?

Most savvy investors know that any investment comes with certain risks. You either can earn a return on your investment or lose money. The risk/reward paradigm dictates that investments with a potential for only small returns generally have low risk and investments with a potential for greater returns generally have greater risk of loss. If you lose money in an investment, it is important to know whether your loss was the product of investment fraud, also known as stock fraud or securities fraud.

What Classifies Investment Fraud?

Investment fraud can involve making false or misleading statements to induce investors to buy a security. Those statements can include misstating the risks of an investments, misstating the true nature of an investment, or failing disclose material facts or risk about an investment.

The Various Types of Investment Fraud

Investment fraud comes in all shapes and sizes, including insider trading, corporate fraud, internet fraud and many more. According to the Securities Investor Protection Corporation, estimates of investment fraud range from $10 to $40 billion in the United States annually, with an increase in securities and investment fraud cases corresponding with the rise of fraud perpetrated via the Internet.

Have You Suffered an Investment Loss?

If you have suffered an investment loss because your broker or brokerage firm misrepresented the nature or risk of an investment or failed to tell you the truth about an investment, contact the attorneys at Dimond Kaplan & Rothstein, P.A. We have helped recover more than $100 million from some of the largest banks and brokerage firms in the world. Contact us to schedule an appointment or consultation today.

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