When a financial plan involves both saving and investing, consumers need to understand securities fraud and potential scams to avoid pitfalls. The security fraud lawyers of Fishman Investment Recovery Lawyers can assist clients with representation to protect money and recover damages.
What is the Risk?
Securities fraud may also be known as stock or investment fraud. In general, it involves dishonest tactics designed to induce an investor to either purchase or sell stock based on inaccurate information. When this occurs, the investor will lose money or could inadvertently violate security laws and regulations.
Sometimes securities fraud occurs when a dishonest stockbroker embezzles money or manipulates stocks. Insider trading and front running are two examples of this. Insider trading involves performing an act of trade that is based on confidential information not readily available to the public. Front-running refers to stockbrokers executing personal transactions based on advanced information provided for the purpose of assisting clients.
Many investors are at risk for scams that can threaten a lifetime of savings. Those who are nearing retirement are a major segment of consumers who are often targeted by criminals. Prudent steps can help people avoid losing money from scammers.
Protecting a Nest Egg
Eliminating fraud risk requires diligence, but many investors can protect their nest eggs. These six tips can help protect investments for the future.
1. Consumers must always thoroughly vet any strangers who contact them regarding personal finances. Investment professionals who initiate contact need to be checked fully with background investigations. Contact the Central Registration Depository to request professional information about registered securities fraud representatives.
2. Ask questions about any aspects of an investment that are unclear or ambiguous. It’s better to ask questions than assume information when dealing with investments.
3. Avoid making significant investment decisions during times of distress or anxiety. Many criminals prey on family members listed in obituaries, for example.
4. Request input from family members or professional fraud lawyers if an opportunity arises that sounds enticing. Avoid making decisions without exploring an investment thoroughly.
5. Watch the progress of an investment carefully after a transaction. Representatives should provide full written reports of an investment to enable an investor to track the progress.
6. Another hallmark of securities fraud involves your investor delaying cash out. Although a window might exist for withdrawal, investors should always have up-front information about this timeframe.
Anytime red flags appear, savvy consumers should weigh risks and benefits carefully. With the proper attention and information, a nest egg can be fully protected.