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Stock Fraud

The stock market has the appealing allure of being a place where you can make a fortune overnight and double it the next day. However, the reality is that most investors see only modest returns and just as many end up losing money in the stock market.

Sometimes these losses are due to poor decision making, but other times they are the result of stock fraud. Brokers can be very convincing and charismatic, especially when they are trying to sell you stocks you don’t want or need. Stock fraud is a very real problem, and no investor is immune.

Common Examples of Stock Fraud

As markets have grown larger, faster, and ever more complex, it has become a lot harder for average investors to protect themselves against stock fraud. It’s often a challenge to know if stock fraud has even taken place, or if risky gambles simply didn’t pay off. If any of the following scenarios sound familiar it should raise a red flag:

  • Pump and Dump – Brokers who buy up a large volume of stock and then encourage smaller investors to buy it too in order to drive up the price. The brokers make huge sums while everyone else looses money.
  • Off Shore Investing – Brokers who encourage investors to pump money into international companies that either don’t exist or have been heavily distorted.
  • Prime Bank – Brokers who falsely claim that financial products have been endorsed or supplied by leading world banks.

This is a very limited list. Stock fraud takes many forms, and new schemes are created all the time. The key is to vet any broker/investment carefully and to always be cautious when taking risks.

Help for Victims of Stock Fraud

If your investment has disappeared because of stock fraud, you may be able to recoup your losses. The first step is to contact a law firm with experience, expertise, and a track record of success in stock fraud cases. They will explore the details of the fraud, apply the principles of the law, and fight hard to secure your damages. Don’t let stock fraud put the finances of yourself and your family in jeopardy.

Over-Concentration in One Type of Investment is Mismanagement

If you requested safe and secure investments but your financial advisor or broker invested a large percentage of your account into one security, one sector of the economy, or one type of investment, it is over-concentration. Failing to diversify your investments over asset class (type of security, i.e., stocks, bonds, mutual funds, cash, etc.) and sector (health care, financials, automotive, pharmaceuticals, oil and gas, consumer goods, technology, international, etc.), as well as “over-concentration” in any one of those areas may be the reason for your losses and an actionable claim against your broker. A broker or advisor who does not diversify his client’s portfolio is potentially liable if that investment declines in value.

Call for a Free Consultation!

Don’t wait to get a free consultation. Contact the Law Office of Howard M. Rosenfield at (860) 677-4334.

Client Reviews
Howard Rosenfield is truly a life saver. After months of working with my financial advisor, I found out he was making risky investments without my knowledge. When I discovered how much money I lost, I thought there was nothing I could do. Howard explained all the difficult terms and what exactly my financial advisor did wrong. If it wasn't for Howard, I would never have recovered my losses and would be under extreme financial distress to this day. J.
Howard’s experience and advice throughout this ordeal was invaluable and reassuring. The law in general is complicated, difficult to understand and very personal. Financial misappropriation is even more personal but Howard’s years of experience and calm demeanor helped keep me calm, focused and moving forward. For anyone in need of a knowledgeable and experienced Investment Recovery Attorney I strongly recommend Howard. Laura
I was filled with anxiety and stress when I selected Attorney Howard Rosenfield to represent me. Instantaneously, I felt comfortable and at ease. Attorney Rosenfield listens attentively to the facts and asks questions and competently reiterates and verifies the accuracy and completeness of my statements. Perseverance, trustworthy and superb legal and communication skills mark Attorney Rosenfield to be one of the best in his field of law. Helen