As the culture of the U.S. shifts more toward personal and community responsibility,
more and more investors want to carefully choose who they do business
with and where their investment cash goes. While our investment fraud
lawyers have talked before about how some con artists prey on investors
who want to put their
investment money where it will do the most good in the world, other con artists pretend
to be community-friendly, local brokers to lure you away from large, corporate
brokerage firms and into their scams.
How Small, Local Brokers & Financial Advisors Can Lure You into Fraud
While there is no harm in seeking a local broker or advisor, you should
be on the lookout for any
signs of fraud or broker misconduct. Although there are many tactics that con artists may use to manipulate
you, some may specifically take advantage of your desire to work with
someone in your community. Here are some common ways they do it:
Some con artists may manipulate your desire to move away from larger investment
corporations. Many con artists lure investors in by offering a more personal investment
experience and building a relationship with victims. While not every friendly,
local advisor or broker is a scammer, you should be treating each investment
recommendation—no matter who it comes from—with the same suspicion
you would a recommendation from a stranger.
Some seemingly local or independent brokers have “invisible”
affiliations. Although, for all appearances, it may seem that your advisor works on
his own, some small operations are actually affiliated with and informed
by larger corporations. For example, many clients of advisors who contracted with
LPL Financial were unaware of the larger company’s role in the investment decisions
made for them, which is particularly important in light of the history
of investor complaints of unsuitability against LPL Financial.
Some con artists may try to contact you based on community affiliations. Some large scams and Ponzi schemes in recent years have been attributed
to con artists who preyed on groups, such as friends and families, church
congregations, local ethnic communities, etc. If you are part of a group
in your community, be suspicious of any sudden buzz around a hot, new
investment or financial professional.
If you have lost money to investment fraud and have questions about recovering
your losses, the investment fraud lawyers with Meyer Wilson can help.
Call us today!