Securities Fraud: Signs You Could Be A Victim

As an investor, securities fraud should be a concern whenever investing in a new mutual fund, stock or new company. However, corporate salespeople can be convincing and if an investment seems attractive, you may take a risk. You should know some signs that fraudulent activity could be happening; if these investment scenarios seem familiar, a securities attorney could be necessary.

Cold Calling

If you never sought out a specific investment but find yourself receiving calls or emails about it, a red flag should rise in your mind. Some scammers will get information about people from other companies or through less than reputable means. Using the details they've gotten, they're able to contact you, seemingly out of the blue. Remain skeptical of any offers.

Overly Positive Promises

Investments always present a risk. Anyone asking you to invest in their stocks, funds or company will admit that, especially legitimate persons; they will engage in an honest discussion about the possibility of loss. Scammers, however, typically paint overly positive pictures of how great your returns will be. In fact, that could be their main selling point. By convincing you that there's "no reason" to worry, they hope to trick you into acquiescing. 

Reluctance to Answer Questions

People engaging in securities fraud, at first, might seem eager to explain how the investment works. Some warning bells may sound in your mind, and as you start to ask questions, their initial helpful tone may change to one of uncertainty or hostility. They might start brushing off your questions. They may say that certain aspects of the investment are too complicated to understand or refer you elsewhere for answers that never come.

Poor Financial Reporting

If the investment doesn't have much of a paper trail, that could be a problem. For instance, companies may ask you to invest in them by purchasing stock shares but claim that they're too new to have many documents. They may tell you that they're working on SEC filings, trademarks, patents or other materials. However, lack of quarterly income statements, expense statements, and other paperwork is highly uncommon for corporations. If they cannot show you financial reports or account for their financial and business history, you have good reason for concern.

If you suspect you're about to be tricked or have already made an investment that may not be legal, try this out and call a securities attorney. Securities attorneys can recommend litigation and other methods of recovering your cash.

About Me

The Internet Makes Learning about Law Easier than Ever

Unlike many children growing up today, I am old enough to remember what life was like before the internet became popular! Many years ago, I ended up in a messy legal situation that stemmed from a simple misunderstanding. It turned out that I actually did not break the law, and finding that out in court was a great relief! While I had a great lawyer who helped me during that time, reading some legal information for myself about the laws surrounding my incident could have greatly eased my worries during the stressful time. I have since dedicated myself to learning more about the law, so I never have to deal with a legal mess again. I thought I would make a blog to share some legal knowledge I have acquired along with some general legal tips. I hope I can help many people!



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