Security and Investment Fraud

Security and Investment Fraud Lawsuit and How Pittsburgh Security and Investment Fraud Lawyer Can Help

If you’re entrusting your hard-earned money to a financial institution, you expect both its safety and substantial growth. Complete transparency is crucial, as you deserve to be informed about your investments and their future. Unfortunately, some deceitful stockbrokers and investment advisors take advantage of this trust, resulting in devastating financial losses. Numerous factors can contribute to such losses, including unsuitable financial advice, conflicts of interest, and outright fraud. When faced with a situation like this, where you or your loved ones have fallen victim to investment and security fraud, it’s essential to seek assistance from a skilled Pittsburgh security and investment fraud lawyer.

At Logue Law Group, we boast years of experience and expertise in handling cases related to investment and banking fraud. Our dedicated team of Pittsburgh DUI lawyers will work tirelessly to help you recover the money you’ve lost.

Different Types of Security and Investment Fraud

Investment fraud encompasses various forms of broker misconduct, each capable of draining your savings and retirement income. Here are a few examples:

Bond Frauds 

Bonds are debt instruments used by companies and governments to raise capital from investors. While financial advisors and brokers often portray these investments as safe for fixed-income investors, fraudulent schemes can wipe out your entire portfolio. Even during the recession, countless individuals fell victim to these scams, which left them financially devastated.

Breach of Fiduciary Duty

A broker serves as the vital link between buyers and sellers, entrusted with the task of negotiating contracts and devoid of personal interests. Think of real estate brokers, commodity brokers, security brokers, insurance brokers, and mortgage brokers, each bound by legal obligations to guide parties towards informed decisions. However, when a broker neglects their fiduciary duties, they veer into fraudulent territory. If you’ve fallen victim to such practices, our Pittsburgh-based security and investment fraud lawyer is here to help you recover your losses.

Churning and Excessive Trading

Picture this: your broker incessantly pushes for excessive trading in the stock market, jeopardizing your security account and undermining your financial well-being. This in itself is a fraudulent maneuver that you shouldn’t tolerate.

Failure to Supervise: Protecting Your Investments

Any reputable investment firm or organization has a duty to establish and maintain strict rules and regulations for supervising their registered financial advisors and brokers. These brokers bear the responsibility of regularly reviewing your portfolio, aligning your trades with your investment objectives and risk tolerance levels. If your broker’s negligence leads to financial losses, it’s a clear case of fraud.

Investment Fraud and Misconduct

When it comes to your hard-earned money, you should be able to trust your brokers implicitly. Sadly, some brokers prioritize their own interests, leaving their clients high and dry. This kind of fraudulent behavior leads to investors losing their money in various schemes, such as:

• Non-traded real estate investment trusts: These lack liquidity and can tie up your funds for a long time.
• High-risk junk bonds: These investments come with a significant chance of default, putting your money at risk.
• Ponzi schemes: Promising high returns, these fraudulent operations depend on new investors’ money to pay off existing ones, creating an unsustainable cycle.
• Structured notes: These hybrid security products may appear attractive, but they often involve complex terms and hidden risks.
• Unsuitable variable annuities: Eldery investors or those who are retired may be pressured into purchasing these products, which may not align with their financial goals.

Margin Trading

A fraudulent financial advisor might suggest that you buy stocks using borrowed money, known as margin trading. This high-risk strategy can generate hefty commissions for the broker, even without additional investments from the customer upfront. Unscrupulous advisors may fail to highlight the risks involved, potentially causing significant financial harm.

Omissions or Misrepresentation by the Broker

Financial brokers have a fiduciary duty to explain every aspect of an investment, including terms, clauses, and potential risks. Failing to disclose these crucial details can constitute fraud if investors end up losing their money due to the broker’s negligence.

Overconcentration of Assets

Diversification is key to mitigating risk and maximizing returns. Responsible brokers consider factors like age, risk tolerance, and financial status to make informed investment decisions on behalf of their clients. However, if a broker disregards these factors and concentrates assets in a limited number of investments, it could be considered fraudulent activity.

Preferred Securities

During market crises, preferred securities may behave more like common stocks and fail to provide the anticipated income. Unlike common stocks, these securities often miss out on upward price appreciation while still being exposed to potential declines. Ultimately, they may fail to generate the expected value.

REIT Issues

A Real Estate Investment Trust (REIT) is a company that ties its assets and investments to real estate projects, distributing 90% of returns as dividends to shareholders annually. Investing in a REIT provides access to a portfolio of properties that individual investors may not typically consider. However, if a broker’s negligence results in a failure to deliver promised returns, it may be necessary to consult a Pittsburgh security and investment fraud lawyer to file a claim for monetary recovery.

Selling Away

When a broker sells or solicits the sale of unapproved private securities, it constitutes fraud. Both the organization and the investor can hold the broker accountable for these actions.

Unauthorized Trading

One common form of investment fraud is unauthorized trading, in which a broker uses a non-discretionary investment account without the investor’s proper permission. This type of fraudulent activity may also involve churning, a practice aimed at generating higher commissions for the broker at the expense of the investor.

Variable Annuity Issues

While investment advisors often present variable annuities as a sound retirement plan, they pose significant risks for elderly investors. These risks arise from high annual costs that can exceed 3% and substantial penalties imposed when the investor liquidates the annuity prematurely.

Seek Help From Pittsburgh Security and Investment Fraud Lawyer

At Logue Law Group, our experienced Pittsburgh criminal lawyers understand the importance of handling investment fraud cases with utmost expertise and diligence, ensuring the recovery of financial losses. Contact us today for a complimentary consultation.