Recovering Losses Caused By Investment Misconduct

Investment Fraud Only Takes One Lie When You’re In Too Deep: A Warning to Investors

In a recent article, the Cincinnati Enquirer interviews a former fraudster and asks the question we all ask when it comes to investment fraud: "How could they do that?" Justin Paperny, a former fraudster who bilked clients out of millions, describes his descent into fraud and admits that he once took $3 million from a 90-year-old rabbi. He acknowledges that these types of financial scams destroy college funds, retirement funds, and life savings, but cites greed and a pressure to perform as the enticement.

How Do Normal People End Up Running Ponzi Schemes and Investment Frauds?

Paperny recounts his own story of starting out on Wall Street with Bear Stearns bringing home $200,000 a year. He describes feeling as though he "deserved more" and made his first step on a slippery slope by removing cash from a shared work account to put into his personal account. From there, after moving on to UBS Financial Services for the $1 million signing bonus, he says pressure to perform and greed took over. He recalls UBS Financial's "massive pressure and expectations" leading to his next move.

"I Knew That I Was Making a Deal with the Devil"

Although he knew the client was "perhaps the worst stock picker in the history of money management" and had no qualms about unethical tactics, Paperny brought in a hedge fund worth $600 million under. "I knew that I was making a deal with the devil," he said, but GLT Venture Fund made up half of his business at that point. Investors were losing money on the hedge fund, and Paperny saw all the signs of a Ponzi scheme shaping up. He continued to bring in new investors because he was making millions in commissions. Eventually, some of the investors smelled something fishy and contacted his superiors at UBS Financial. He was fired, and then he was prosecuted.

What Can Investors Do to Avoid Investment Fraud?

Paperny gives investors this advice to avoid investment fraud:

  • Know your own weaknesses.
  • Be skeptical of words like "guarantee" or "once-in-a-lifetime opportunity."
  • Don't be intimidated.
  • Demand documents and references.

Meyer Wilson In the News

Read the latest news regarding alleged investment fraud and broker misconduct cases nationwide. The securities fraud attorneys at the law firm of Meyer Wilson have been helping investors recover losses since 1999.

When Choosing an Attorney, Results Matter

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    Retirees Recover in Excess of $10,000,000 of Retirement Losses
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    Meyer Wilson Recovers More than $3,800,000 for Elderly Victim in Ponzi Scheme Case
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