Understanding Investment Fraud Can Help You Protect Your Investments

In this multi-part series of blog posts, we are going to discuss your money: namely, how to protect your investments from fraud in its many forms. One of the most important things you can do to protect yourself is to know as much as possible about investing and take the steps to make sure you have an understanding investment fraud. Subsequent posts will discuss how to identify investment fraud and what to do if you become the unfortunate victim of investment fraud.

Understanding Investment Fraud

First, it is important to understand what investment fraud is. Investment fraud comes in many forms, ranging from stockbroker fraud, Ponzi schemes, and “pump and dump” scams, and the misrepresentation of the risks of an investment. A stockbroker might commit fraud by failing to disclose or misrepresenting the risks of an investment, or by churning your account simply to generate commissions.

A Ponzi schemer might convince you to part with your money by promising a very high rate of return on an investment. A “pump-and-dump” scam can involve a person or group of people who promote false information to artificially inflate the price of a cheap stock before selling off their own shares for a profit.

You may have noticed that one central theme to the myriad types of fraud is that they all involve some level of deceit.

The above is by no means a comprehensive list of all forms of investment fraud, it can also involve:

  • Mail and Social Media Fraud
  • Microcap Fraud
  • Foreign-Currency Trading Fraud
  • High-Yield Investment Programs

Investment fraud comes in various forms and is not limited to any specific subset of investment. Understanding investment fraud can help you understand the general risks associated with investing your money and be a wiser investor in the future.

Stay tuned for Part 2 of our blog series, in which we will discuss what to do to avoid becoming the victim of investment fraud.

Are You a Victim of Investment Fraud? 

If you have suffered an investment loss because your broker or brokerage firm misrepresented or omitted crucial facts or information before you invested, you may have legal rights that require your immediate attention.

With offices in Los Angeles our securities lawyers have helped investment fraud victims throughout Santa Monica, Beverly Hills, and Hollywood and recovered over $100 million from banks and brokerages firms for their wrongful actions.

Call an Investment Fraud Attorney Today

Contact an attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

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