Category Archives: investment fraud
FINRA Bans Broker for “Churning” Customer Accounts
A stockbroker has an ethical and legal duty to make “suitable” investments with your money. The Financial Industry Regulatory Authority (FINRA), the self-regulatory organization for brokerage firms in the United States, explains this duty in its Rule 2111. Specifically, the rule says a broker must “have a reasonable basis to believe that a recommended… Read More »
Florida Man Settles SEC Charges Arising from “Boiler Room” Scam
On August 21, a West Palm Beach resident agreed to settle charges brought by the U.S. Securities and Exchange Commission over his alleged operation of a “boiler room” fraud which reportedly scammed investors out of more than $1.5 million. According to a complaint filed by the SEC with a federal court in Philadelphia, Moshe… Read More »
SEC Sanctions Broker Who Defrauded Investors in Real Estate Company
Many people rely on family and friends for investment advice. While there is nothing wrong with this, it is important to always do your own homework before trusting someone else—even someone you think you know—with your money. Securities fraud schemes often rely on misplaced trust by inexperienced investors. For example, the U.S. Securities and… Read More »
Ex-California Broker Stole Millions from Trust Clients
Many people establish a living trust to manage their assets. A trust is an estate planning device where a person transfers their assets to a trustee. The trustee can be the same person who established the trust or it can be someone else. Whoever the trustee is, he or she must manage the trust… Read More »
Alleged New York Insurance Scammers Face Civil, Criminal Charges
Insurance is often a vehicle for securities fraud. Scam artists lure investors with the promise of easy profits earned through the sale of various insurance products. But those promises often do not translate into reality, leaving investors to pick up the pieces. SEC v. Griffin The SEC recently charged two men with running just… Read More »
SEC Obtains Judgment Against Ex-Radio Host Who Ran Real Estate Ponzi Scheme
On July 17, the U.S. Securities and Exchange Commission obtained a civil judgment against two individuals who cheated investors and lenders out of nearly $7 million through a fraudulent real estate investment scheme. The SEC said the pair, together with a third person, “misappropriated millions of dollars raised from investors through the fraudulent sale… Read More »
Is Your Investment Advisor Really “Conflict-Free”?
Investment advisors have a legal obligation to disclose any conflicts of interest which may affect their clients’ accounts. All registered investment advisors must file a disclosure statement, known as Form ADV, with the SEC and state regulators describing any brochures or other solicitations used to attract clients. Form ADV must include any statements regarding… Read More »
SEC, California Prosecutors Expose $2.6 Million Ponzi Scheme
Investors should always be cautious when dealing with unregistered investment advisors. Registration with the U.S. Securities and Exchange Commission and state officials are important tools that provide investors with access to critical information. It is far too easy for scammers to lure unsuspecting investors with fake credentials and non-existent investment products. SEC v. Moore… Read More »
How “Affinity Fraud” Costs Investors Millions
Many securities scams can be classified as “affinity fraud.” As described by the U.S. Securities and Exchange Commission, this refers to cases where the scammers “prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups.” The scammers exploit this group affinity to lure members into financing largely… Read More »
SEC Bars Three Brokers for “Churning” Client Accounts
Many securities brokers work on commission. This generally means the broker receives a payment for each trade he or she executes on a customer’s behalf. While this is perfectly ethical, some brokers cross the line and engage in an illegal practice known as “churning.” As explained in a 1986 federal appeals court decision, there… Read More »
