When people think of elder financial abuse, they often imagine criminals writing themselves into a will or stealing from a grandmother’s purse. What people often overlook, however, is elder financial abuse that comes in the form of investment fraud or stockbroker misconduct. 

Unfortunately, senior investors are vulnerable to fraud, and this age group is often targeted by con artists. Whether they’re touting a “senior specialist” designation or trying to sell you on a confusing new investment strategy, these kinds of con artists are really only out for your savings.

Here are a few ways you can keep yourself or your elderly loved ones safe from investment loss:

• Always do your research before investing, including checking out the promoter, the investment, and the investment company.
• Be suspicious of any high-return with low-risk or “too good to be true” investments. Remember that all investments come with some element of risk, and that risk should be proportionate to the returns. 
• If you feel harassed or pressured to invest, it’s a huge red flag for investment fraud—no legitimate professional should ever try to pressure you into a deal.
• Always monitor your account statements, and check for any strange activity, errors, or unexpected performance. 

If you are a senior investor and worried about falling prey to an investment scam, please see our article, “Nine Signs That You’re Vulnerable to Senior Investment Fraud.” And, if you fear that you have already become a victim, please schedule a free and confidential consultation with an experienced investment fraud lawyer today. You can reach the Law Firm of Meyer Wilson at 1-866-8-BROKER (1-866-827-6537) or by filling out the convenient online contact form on this page. 

What to Do When the Payments Stop 

If you have stopped receiving payments or otherwise suspect you have become the victim of a Ponzi scheme, these should be your first two steps:

1. Gather all the documentation that you have about the investment. This might include account statements, bank statements, the prospectus, correspondence with your advisor, and contact information related to the account. 
2. Get in touch with an experienced Ponzi scheme lawyer. An attorney who is experienced with Ponzi scheme and investment scam cases can help you go over the documentation, file a complaint, and take steps to recover your losses. 

The securities fraud attorneys with the Law Firm of Meyer Wilson have represented hundreds of clients across the nation in FINRA mediation, arbitration, and litigation, and we would be happy to review your case in a completely free, no-obligation consultation. Please reach out to us today at 1-866-8-BROKER (1-866-827-6537), or get started by requesting our FREE book, Five Signs of Investment Fraud …And What to Do if it’s Happened to You. 

“Crowdfunding” is a trend that seems to be taking the internet by storm, and it has been responsible for funding a number of creative and professional pursuits. However, excited investors may want to approach online crowdfunding investments with caution.

As an increasing number of new crowdfunding opportunities pop up on websites, forums, and social media sites, investors should be aware that these online investment opportunities could be a scam, a cover for stockbroker misconduct, or just simply unsuitable for their financial situation and goals. 

Some state and federal regulators have already issued warnings to investors who are interested in crowdfunding, and we agree that investors should be concerned.

Investment crowdfunding is potentially dangerous for investors because:

• There’s little protection for investors if something goes wrong.
• Anyone could claim to be legitimate and reach vulnerable investors. 
• These options can be marketed to unsophisticated investors or investors for which it would unsuitable.  

For more information about our internet crowdfunding concerns, please see our article, “Attorney Warns of Crowdfunding Fraud from Online Boiler Rooms.”

If you have lost money to an investment crowdfunding scam, reach out to us for help. The experienced investment fraud attorneys with the Law Firm of Meyer Wilson represent harmed investors across the country in stockbroker mediation, arbitration, and litigation. All of our cases are handled on a contingency-fee basis, and you can meet with us in a free initial consultation for more answers. Give us a call today at 1-866-827-6537 for more information, or simply fill out the confidential online form this page to learn more.

The rise of the Internet has seen a proliferation of offshore investment scams that target inexperienced and experienced investors alike. While many of these investments offer flashy, impressive returns and sometimes promise tax immunity, even legitimate offshore investments can come with serious risks for investors who don’t take the time to understand the real details of the investment. 

If you’re considering an offshore investment that sounds “too good to be true,” keep in mind the real risks of these types of investments:

• The high returns come with high risks of loss. High-yield investments should come with higher risks. If it’s touted as “risk free” or “completely safe,” it’s a red flag. 
• You may be doing business in a country that has little or no protection for investors. If you invest outside of the US, then US laws probably won’t protect you or your cash. 
• You may be facing complicated tax issues. Although some offshore investments or charitable investments may promise to be “tax free,” the reality is that it can turn into an expensive international tax headache. 

To learn more about how to research an investment, get started with our helpful article, “Basic Steps for Reviewing an Investment and Avoiding Investment Fraud.” And, for more detailed information, please also see our FREE book, Five Signs of Investment Fraud …And What to Do if it’s Happened to You. 

The investment fraud lawyers with the Law Firm of Meyer Wilson represent investors across the country in securities mediation, arbitration, and litigation claims. If you believe you have lost money to an investment scam, please reach out to us today at 1-866-8-BROKER (1-866-827-6537) for a free case review. 

Investors have been chasing yield for years now, trying to make up losses sustained during the 2007-2008 financial crisis. They’re also attempting to preserve their current assets by investing in “safe” products. Unfortunately, these two goals can’t be met with the same product, and investors looking for such investments often get taken advantage of by con artists and unscrupulous brokers and advisers. Bonds are a good example of this. 

Investors looking for guaranteed, stable returns typically invest in bonds, because they are marketed as safe products that carry little to no risk to principal.

Unfortunately for investors, this is a myth. Bonds do carry risks, and products marketed as “bond-like” carry even more. 

Reverse convertibles, for example, are often marketed to unsophisticated investors as “bond-like” products that offer a higher-yield alternative to traditional equity and fixed income investments. The investment products’ many drawbacks aren’t discussed, however, and investors who thought they were preserving their assets by investing in them can end up losing all of their principal investments.  

Brokerage firms and other financial professionals also use investors’ perceptions of bonds to sell structured products – extremely complex investments that carry a wide range of risks. 

Securities America, for example, sold $700 million of private placement notes in Medical Capital Holdings, Inc. by telling advisers the products were “the missing piece that should be included in your fixed-income arsenal.”

Advisers took them up on this, and investors ended up losing everything. 

The Hartford Financial Services Group Inc. also allegedly used misleading statements about bonds to sell one of its mutual funds, the Hartford Floating Rate Fund (HFLAX).  

“In particular, the brochure [for the fund] contained misleading statements that the mutual fund was appropriate for bond investors concerned about the price stability of their investments, provided the potential for greater price stability compared with other fixed income investments, and was appropriate for investors seeking some degree of capital preservation,” stated FINRA. “Given the conditions in the bank loan market during the relevant period, these statements were not accurate.”

Bottom line? Investors looking for safe investments should be leery of any marketing claims that reference bonds. Most aren’t what they seem. 

About our law firm:

The law firm of Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1-866-827-6537 for more information or complete the online form on the top of this page and we will respond promptly.

Earlier this month, the SEC charged Daniel F. Peterson of Spokane Valley, Washington with fraudulently using the JOBS Act, which legalized crowdfunding, to entice and cheat investors.

The SEC still hasn’t passed regulations governing crowdfunding, but that hasn’t stopped companies, CEOs, and financial professionals from using the impending practice to increase their bottom lines. 

Peterson allegedly told investors he was planning a stock offering that would render profits of up to 1,300% over 10 years by using crowdfunding to raise billions of dollars from the general public. 

“The JOBS Act is intended to help small businesses raise capital, not to legalize fraud or give unscrupulous entrepreneurs a right to make false claims to fleece investors,” Michael S. Dicke, associate director in the SEC’s San Francisco regional office, said in a statement.

The complaint against Peterson is the first SEC complaint filed that accuses someone of using the JOBS Act to defraud investors. It isn’t the first crowdfunding complaint filed by the country’s regulators, however. 

Massachusetts Commonwealth Secretary William Galvin filed two of the nation’s first crowdfunding-related charges in December 2012. In the lawsuits, the state securities regulator accused two out-of-state oil and gas companies of illegally selling private placement securities to Massachusetts investors. Gavin said he hoped the lawsuits would influence the SEC’s final rules over crowdfunding.

“I support rules that allow early-stage companies to raise capital more easily,” Mr. Galvin said in a statement. “But I would urge the Securities and Exchange Commission to adopt meaningful and effective 'bad actor' rules that will disqualify securities law violators, brokers with revoked licenses and other fraud operators from using these exemptions from the securities registration requirements.”

Though the JOBS Act was passed in 2012, SEC officials have said it’s impossible to set a date for when rules governing the practice (and crowdfunding) will be ready. 

We have "a lot of learning to do,” David Blass, chief counsel for the SEC’s division of trading and markets, told The Business Journals. 

In the meantime, let’s hope the commission continues to go after unscrupulous advisers and brokers who use the Act to cheat investors. 

About our law firm:

The law firm of Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1-866-827-6537 for more information or complete the online form on the top of this page and we will respond promptly.

Brokers and financial advisers across the country were slammed for putting retirement savers at risk in last week’s PBS documentary “The Retirement Gamble.” 

The documentary highlights the problems with 401(k)s and other actively managed funds, and blames advisers for steering investors into high-fee investments for their own profit.

It also discusses index investing and the national shift from pension plans to defined contribution plans, such as 401(k)s. 

Zvi Bodie, an economist at Boston University; Assistant Secretary of Labor at US Department of Labor Phyllis Borzi; Vanguard Founder John Bogle; Teresa Ghilarducci, an economist at The New School; President of Prudential Retirement Christine Marcks; Helaine Olen, author of “Pound Foolish”; and Jason Zweig, a columnist for The Wall Street Journal, are all speakers in the film. 

According to Ghilarducci, 401(k)s are “one of the only products Americans buy that they don't know the price of it.” 

“It's one of the products Americans buy that they don't know its quality,” she says. “It's one of the products Americans buy that they don't know its danger.”

Representatives sell the products and other actively managed funds, according to Ghilarducci, because there is money in them. 

“Basically, your guy is out for himself to maximize his sales, and the way he does it is to be loyal to the mutual fund,” she says. “They try to sell you the most profitable products.”

Bogle also expresses his concerns about financial representatives, saying brokers may be making financial arrangements with fund firms in order to line their own pockets. 

"The brokers are getting a little religion here,” he says. “They're saying, 'Why should I distribute your funds unless you pay me to? You get these big management fees — I want some of it. You're getting plenty. Give me some.'”

While the film did have its share of critics, there were many more supporters. The AARP called the film a “wake-up call on 401(k) fees” for investors, 70% of whom don’t know they pay any fees at all. A piece in Forbes magazine called the documentary “excellent,” and said watching it would help investors understand why millions of Americans are, like PBS correspondent Martin Smith, too broke to stop working. 

The National Association of Personal Financial Advisors (NAPFA) also praised "The Retirement Gamble," saying it made a strong case for “fee-only” planning and calling it a “wake up call for legislators and regulators to finally do something to protect American investors.” 

“PBS Frontline put a spotlight on how commissions, hidden fees and expenses can devastate the average consumer’s retirement savings and how the lack of a fiduciary standard leaves investors unprotected,” said the NAPFA in a statement.

“While broker-dealers largely want to maintain the status quo, Americans are struggling to make ends meet and save for their futures —they deserve the protection of a fiduciary standard from every professional who touches their financial lives.”

Watch the film and read interviews with Bogle, Olen, Ghilarducci, and others here. 

About our law firm:

The law firm of Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1-866-827-6537 for more information or complete the online form on the top of this page and we will respond promptly.

Financial credentials are a way advisers can market their expertise to the investors who most need their services. In recent years, however, new credentials have arisen that enable unscrupulous advisers and financial professionals to target older Americans and sell them inappropriate and/or fraudulent products and services. 

Of the nearly 100 financial designations currently in use, this is particularly true of “senior specialist” designations. Though they sound legitimate, these designations are often nothing more than a marketing ploy used to gain the trust of older investors.

Some organizations that grant the titles do have strict qualification requirements, but many do not. To make matters worse, most senior investors can’t tell the difference. 

“These designations imply special training and experience in providing financial advice to seniors,” wrote Consumer Financial Protection Bureau Director Richard Cordray in a recent report.

“If well grounded, they can provide a sound basis for recommending financial products to help consumers prepare for and maintain a secure retirement. In preparing the enclosed report, however, the Office for Older Americans heard frequently from industry representatives, state and federal regulators, and consumer organizations that older consumers may be confused or misled by financial advisers touting senior designations.”

The 62-page report, which was prepared for Congress, highlights 50 confusing and misleading senior designations – some of which require nothing more than an application (and presumably a fee). According to the Bureau, these designations are “extremely confusing” for consumers, particularly because the titles and acronyms for some designations were nearly identical to others. 

“Every senior designation is different, and there is a very wide range in their characteristics,” stated the Bureau in its report. “For example, there are differences regarding training requirements, qualifying examinations, continuing education requirements, oversight by the conferring organization, complaint procedures for aggrieved clients, and accreditation. Moreover, the presence, depth and rigor of these components vary widely among designations.

For example, Certified Estate Planners (CEP), Chartered Estate Planning Practitioners (CEPP), and Certified Estate and Trust Specialists (CES) are different designations conferred by different organizations, with different training requirements, yet the similarity of these titles may lead consumers to believe each possess similar qualifications and expertise.”

Other misleading or illegitimate designations highlighted in the Consumer Financial Protection Bureau's report included the Accredited Retirement Advisor (ARA) designation, the Certified Healthcare Financial Professional (CHFP) designation, and the Registered Financial Planner (RFP) designation. 

According to the Bureau, these misleading designations are often combined with “free lunch” seminars and workshops to lure unsuspecting seniors into scams. A recent SEC, FINRA, and NASAA joint sweep of 110 firms offering such seminars revealed that many touted the financial expertise of the adviser hosting the event in a way that was misleading. For example:

Many presenters called themselves “Certified Senior Advisers,” “Elder Care Asset Protection Specialists,” and/or “Chartered Retirement Planning Counselors.” All of these titles sound impressive, but according to the examiners, “there is no regulatory qualification or registration that recognizes such expertise [emphasis added].”

Because of the wide-sweeping confusion these titles are creating, many regulators, including FINRA, have recommended that lawmakers and/or brokerage firms themselves prohibit the use of specious designations that do not require a rigorous curriculum, continuing education, demonstrable experience, and an emphasis on ethics. In the report, the Bureau noted that state and federal regulations on the credentials would help protect consumers shopping for senior financial expertise. 

Let’s hope lawmakers soon begin to take these recommendations seriously. For now, seniors can protect themselves by checking out an adviser’s qualifications before parting with any funds. 

About our law firm:

The law firm of Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1-866-827-6537 for more information or complete the online form on the top of this page and we will respond promptly.

The price of gold plunged 9.1% on Monday – the steepest decline in 33 years – after having dropped 5% just three days earlier. This could mean big losses for the countless gold investors who purchased more than a billion dollars worth of gold-linked structured notes over the past three years. 

Industry experts are calling this week’s plunge in price a kind of “flash crash,” but no one really knows whether or not the price of gold will rebound. If it doesn’t, a lot of investors are going to lose significant amounts of money in investments they believed were a sure bet. 

Of the $1.28 billion worth of gold-linked notes that are still outstanding, a large portion promised some type of protection against loss. Like everything with structured products, however, any guarantees of “principal protection” are highly complex. 

In the case of the gold-tied notes, many promised protection against losses only up to a certain percent. The one-year, gold-tied notes sold by Barclays Plc (BARC) in Sept. 2012, for example, only offered protection up to 15%. Citigroup’s two-year, gold-linked notes, also sold in Sept. 2012, only offered 10% protection against losses.

Many investors, however, were likely unaware of these caps. 

This is because the broker-dealers who sell structured products often either gloss over the products’ risks or choose to focus exclusively on the products’ benefits. For example, one broker-dealer explains the structured notes like this:

“A Structured Note combines two elements: A bond (that protects your principal) makes up most of the investment (typically 80%), and the rest of your money is put into a derivative. Because the investment bond element in Structured Notes can be designed to give a return that equals your initial investment (as long as you keep the product until maturity), your principal will be protected. And the derivative element offers you the potential to achieve higher returns when compared with a standard deposit.”

Clearly, this isn’t always the case. 

If you have suffered losses due to a gold-linked structured note purchased from a brokerage firm in the last few years, please contact one of our securities arbitration attorneys today for a free case evaluation. 

About our law firm:

The law firm of Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1-866-827-6537 for more information or complete the online form on the top of this page and we will respond promptly.

As if investors didn’t already have enough reasons to steer clear of exchange-traded funds (ETFs), new data show that the funds’ average tracking errors are on the rise.

A fund’s average tracking error is the difference between its return and its benchmark index’s return. Most ETFs (not including inverse or leveraged ETFs) attempt to match as closely as possible the returns of their underlying benchmarks. This means that if a particular ETF tracked the S&P 500 and the S&P 500 gained 13.4% in 2012, then a well-managed S&P 500 ETF should theoretically render an investor a return of 13.4% minus the fund’s expense ratio. In practice, however, this isn’t always the case.

In fact, the average ETF’s tracking error for 2012 was 59 basis points, according to InvestmentNews. That reflects an increase from 2011, when the average tracking error was 52 basis points.

Two of the funds with the largest tracking errors in 2012 were iShares MSCI Emerging Markets Financials ETF (EMFN), with a tracking error of 5.3%, and Guggenheim S&P 500 Equal Weight Utilities ETF (RYU), with a tracking error of 4.4%. 

Higher than average expense ratios will necessarily translate into higher than average tracking errors, but ETFs based on illiquid indices also tend to have greater tracking errors than ETFs based on bigger, more liquid indices. Investors who decide to invest in ETFs should make sure they fully understand the products’ risks, including a particular fund’s average historical tracking error. Additional risks to consider before investing can be found here. 

About our law firm:

The law firm of Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1-866-827-6537 for more information or complete the online form on the top of this page and we will respond promptly.

Massachusetts regulators want to be among a small handful of states to require criminal background checks for registered investment advisors. The proposed rule change comes shortly after the Massachusetts Securities Division’s Registrations, Inspections, Compliance and Examinations Section was granted access to the state’s electronic criminal history database, the “iCORI system.”

Investment advisors are typically required to register in the state in which they do business, and most states require the disclosure of certain criminal convictions. Different states, however, handle those disclosures differently, and many don’t require criminal background checks to verify the information. 

Some states, such as Maine, require investment advisor registrants to be fingerprinted. Those prints are then run through a state background check.

Other states, including Florida, take the process one step further. After the state check is completed, Florida officials forward the prints to the FBI for federal processing.

Other states may require a more extensive background check, but, many states, including Massachusetts, currently take the investment advisor registrants at their word. 

They don’t verify the facts, and they don’t take measures to ensure the registrant has told the entire truth. Unfortunately, this allows con artists, who probably weren’t going to tell the truth anyway, to escape regulator scrutiny. 

"The unfortunate reality is people are able to stay in the business despite serious blemishes on their records," Barbara Roper, director of investor protection for the Consumer Federation of America, told the Wall Street Journal. "A criminal-background check may identify some of those people."

Protecting consumers by prohibiting convicted felons from serving as investment advisors seems like a no brainer, but legislators don’t always see so clearly. Hopefully, the Massachusetts proposal will pass, and additional states will follow suit. 

The Massachusetts proposal is currently open for comment. Written comments are due by 5 p.m. on May 15. To learn more, including where to send comments, read the complete Request for Comment. 

About our law firm:

The law firm of Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1-866-827-6537 for more information or complete the online form on the top of this page and we will respond promptly.

Spring has bloomed, the winter storms have ebbed, and snow has (mostly) melted, but one thing hasn’t changed this year: investment fraudsters and con artists continue to target seniors in investment scams across the nation.

To help stop elder financial fraud, follow these top tips from the Certified Financial Planner Board of Standards:

1. Verify credentials, designations, and supposed specialties. Many con artists and fraudsters who target seniors use fake credentials, designations, or supposed specialties to lure in their victims and gain their trust. Make sure you double-check the legitimacy of any special credentials or designations an advisor, broker, or investment promoter uses. (For tips on understanding investment credentials, click here.) You should also ask whether the individual is required to provide advice under the fiduciary standard of care and what organizations license or supervise his or her services. 
2. Understand what you’re buying. There is a plethora of complex investment products on the market today, and they all have a long list of risks and potential downsides. Unfortunately, many financial professionals are selling these products to seniors based on the potential benefits alone. This is particularly true when it comes to annuities and insurance products. To help prevent fraud, ask as many questions as you need to ask until you fully understand the recommended product. In particular, make sure you know if and how you can get your money out if you need it, whether withdrawing your funds will carry a hefty penalty or fee, and what kind of fees and commissions the financial professional recommending the product will get if you make the investment. Also make sure to get the answers to your questions in writing. 
3. Beware of “free lunch” seminars and/or educational workshops. Seniors are particularly vulnerable to these scams. According to FINRA, approximately 80% of senior citizens in the U.S. receive at least one invitation to a free lunch seminar per year. Many seniors receive more than one invitation. While those so-called “workshops” may seem like a good idea, it is important to remember: There is no such thing as a “free lunch.” 

For more tips on avoiding elder financial fraud and investment scams, read the CFP Board’s Financial Self-Defense for Seniors here.

About our law firm:

The law firm of Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1-866-827-6537 for more information or complete the online form on the top of this page and we will respond promptly.

Signs That You’re Being Pressured into an Investment Scam

One of the best ways to resist a high-pressure pitch is to recognize the signs and be ready to do your research and always take the time to verify what you’ve been told before you invest. Here are just a few of the ways a fraudster or unscrupulous financial professional might try to pressure you into an investment scam:

• The fraudster may claim that you must “invest now” or you’ll be missing a “once-in-a-lifetime opportunity.”
• The fraudster attempts to pressure you into investing by claiming that everyone else is doing it or pointing to other friends and family members who have already invested. 
• The fraudster attempts to talk you into investing by creating fear about an upcoming financial change, like retirement or a divorce. 
• The fraudster attempts to make you feel indebted or manipulate your emotions to get you to invest. 

Our investment fraud lawyers have over 50 years of collective experience, and we would be happy to review your situation and provide guidance in recovering your investment losses due to fraud. Schedule a free and confidential consultation with the Law Firm of Meyer Wilson today by calling 1-866-8-BROKER (1-866-827-6537) or simply filling out the online contact form on this page today.

If you have lost money in an investment scam or Ponzi scheme, you may be unsure what to do. However, as a general rule, one of your very first steps should be contacting an experienced Ponzi scheme attorney who can help. 

Here are just a few reasons why you should speak with an attorney before you take further action to recover your losses:

• There may be many options available to you. Because victims have sometimes signed away their ability to sue their brokers, and because these situations are often more complicated than they appear, you may have several avenues available for pursuing your claim. Speaking with an experienced Ponzi scheme attorney can be extremely helpful for determining your options, even if you do not eventually decide to hire an attorney to handle your case. 
• You could accidentally make your loss recovery more difficult. In some cases, taking the obvious first steps could be harmful to your case in the long run. Before you contact your broker or brokerage firm with your Ponzi scam suspicions, you should discuss your situation with an experienced securities fraud attorney. 
• You may not have the resources and expertise to pursue your claim. Unfortunately, most Ponzi scheme cases are complicated and deal with specific legal knowledge that may be inaccessible even to other attorneys. Reaching out to an investment fraud law firm means having the experience and expertise to fully pursue the recovery of your losses. 

If you have lost money in a Ponzi scheme and have questions about recovering your losses, please speak with an experienced Ponzi scheme attorney today. You can reach us at 1-866-8-BROKER (1-866-827-6537) or by filling out the confidential online contact form on this page. 

For more information about Ponzi schemes and other investment scams, please also request your FREE copy of our important book, Five Signs of Investment Fraud …And What to Do if it’s Happened to You. 

If you’re like most investors, when you hear that a broker or advisor has been barred or suspended from the securities industry, you believe the threat posed by that person has been removed. Sadly, this isn’t always the case.  

Fraudster Frank Bluestein, for example, was sanctioned for defrauding investors during the credit crisis. According to the SEC, Bluestein was the single largest salesperson in Edward May’s $350 million Ponzi scheme. He allegedly raised around $74 million from more than 800 investors by making a variety of misrepresentations and omissions to potential investors. 

“Bluestein convinced elderly investors to refinance their homes to invest in securities that he falsely claimed were safe,” said Merri Jo Gillette, Director of the SEC’s Chicago Regional Office. “His lies, false assurances, and unscrupulous tactics put many investors at risk of losing not only their life savings, but also their homes.”

Though Bluestein has been suspended from the securities industry, he hasn’t exited the investment world. Instead, he is one of many barred or suspended financial professionals now holding themselves out as “investment coaches,” “wealth coaches,” and/or “investment teachers.” InvestmentNews reporter Bruce Kelly says Bluestein is connected to several online trading websites, and that he also appears in a YouTube video about trading futures. 

Educated investors who come across Bluestein online may know to run him through BrokerCheck (which shows he has had well over 100 customer disputes levied against him). Less savvy investors, however, may see him only as an intelligent teacher – never guessing that he played a key role in the largest Ponzi scheme in Michigan history. 

Bluestein’s reinvention of himself is nothing new. Many “barred brokers with disreputable histories often find it hard to give up the potential easy money of selling investment strategies or products,” stated Kelly. 

Investors who want to protect themselves against such fraudsters should be particularly vigilant about investigating anyone they consider doing business with. Understanding the ins and outs of financial credentials and investment industry designations also helps. For more tips on choosing an advisor or broker, click here. 

About our law firm:

The law firm of Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1-866-827-6537 for more information or complete the online form on the top of this page and we will respond promptly.

We recently talked about how to spot high-yield investment fraud, but what happens if you’ve already become a victim? Here are four steps you should take as soon as you suspect a scam:

• Contact an investment scam attorney as soon as possible. The single most important thing you can do if you suspect high-yield investment fraud is contact an experienced investment lawyer as quickly as you can for guidance. An experienced investment fraud lawyer can help you pinpoint the scam and take action to recover your losses. 
• Do not try to take advantage of the scam. If you believe that the investment program you’re involved in is a Ponzi scheme or otherwise fraudulent, you may be tempted to try to outsmart the scam and make a little extra cash. Keep in mind that fraudsters are good at what they do, and you’ll almost always come out on the losing end.  
• Do not refer more people to the scam. Although you may be tempted to try to recover some of your losses through referral bonuses, realize that you are only putting yourself and more unsuspecting people at risk of what is considered affinity fraud.
• Do not continue to pay into the scam. Although it seems obvious, this is worth mentioning. If you believe that you are involved in high-yield investment fraud, do not continue to send in payments and reinvest until you’re sure everything is legitimate. 

The investment fraud attorneys Meyer Wilson have more than 50 years of collective experience representing harmed investors across the nation in stockbroker mediation, arbitration, and litigation.

If you have been the victim of high-yield investment fraud or an online investment scam, reach out to us today at 1-866-8-BROKER (1-866-827-6537) to schedule a completely free and confidential legal consultation with an experienced investment scam attorney. 

The SEC published its examination priorities for 2013 late last month, and dually registered advisors were at the top of the list. 

Recently, more and more financial professionals have taken to wearing two hats, acting as investment advisors to some clients and broker-dealers to others. This arrangement results in a hybrid practice, which blurs the line between the investment advisor and broker-dealer industries and enables the professional to earn money through both fees and commissions. This “continued convergence,” however, is also the reason dually registered advisors are being called a new and potentially potent threat to investor safety. 

“[These days] it is not uncommon for a financial professional to conduct brokerage business through a registered broker-dealer that she does not own or control and to conduct investment advisory business through a registered investment adviser that she owns and controls, but that is not overseen by the broker-dealer,” stated regulators in a Feb. 21 announcement. “This business model presents multiple conflicts.”

Regulators said dually registered advisors and their firms should expect an SEC examination at some point in the coming year. In particular, examiners will be reviewing:

• How dually registered advisors and their firms sort clients into advisory or brokerage accounts;
• How dually registered advisors and their firms satisfy their suitability obligations when making recommendations to clients;
• The financial incentives dually registered advisors and their firms may have for making specific recommendations to clients; and
• Whether all conflicts of interest are fully and accurately disclosed. 

To learn why the difference between an investment advisor and broker-dealer matters, read this.  For additional information about the SEC’s examination priorities for 2013, click here.

About our law firm:

The law firm of Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1-866-827-6537 for more information or complete the online form on the top of this page and we will respond promptly.

• Ask your broker or advisor to describe the worst-case scenario. All investments come with risks, and you shouldn’t be afraid to ask your advisor what happens if things go wrong. Ask your advisor to describe the worst-case scenario—and don’t forget to read the “fine print” on your own to verify what you’ve been told and learn more about the risks.  
• Find out about fees and commissions. Many structured products come with high up-front fees, so make sure you understand where your money is going. Additionally, if your broker gets a commission for selling the structured product, realize that he or she might be tempted to push it even though it’s unsuitable for you. 
• Take a look at your overall financial picture. How will this investment fit with your current portfolio and overall financial objectives? If the worst happens, can you tolerate the losses? Not every investment is right for every investor, and it’s important to make sure an investment is really suitable for you before investing.  
• Do your own research. As an investment fraud lawyer, I cannot emphasize this enough. Check with FINRA, the SEC, and your state regulators. Look into the background of the promoter, the investment, and associated companies, and pay special attention to any complaint and disciplinary history. Read all the materials you’ve been given, and do a quick Google search or two. 

If you believe you have become the victim of structured product fraud, or if you’re unsure if your broker or advisor can be held liable for your investment losses, please reach out to an experienced investment fraud lawyer today at 1-866-8-BROKER (1-866-827-6537). 

It’s important to understand that all investments come with some element of risk, especially those that offer high returns. Here are just a few examples of why hedge funds may be risky for some investors:

• Hedge funds can be complicated and are not always transparent. Hedge funds may use speculative investment strategies, and the actual companies invested in may not always be known to the investor. 
• Hedge funds are only minimally regulated. Hedge funds are not required to register with the SEC and lack the regulatory oversight that other investments are subjected to. 
• Hedge fund managers get paid even if investors don’t. Because of the way hedge fund managers are paid, it is possible for them to make money when investors don’t – meaning the person making investment decisions for the hedge fund is likely far more tolerant to risk than the investors involved.
• Some hedge fund risks are difficult to measure. Because hedge funds look at long-term performance and often involve illiquid or volatile investments, the value and performance of the fund may be hard to gauge. 

If you believe you have been the victim of stockbroker fraud related to a hedge fund, don’t wait until it’s too late to pursue the recovery of your losses. Reach out to a friendly and knowledgeable investment fraud attorney with the Law Firm of Meyer Wilson today. You can reach us at 1-866-8-BROKER (1-866-827-6537) to schedule a completely free and confidential consultation, or you can fill out the online contact form on this page for more information. 

You’ve been pitched a complicated, new investment product, or you’ve met a financial advisor or broker who claims to have an innovative new investment strategy that will make you rich. 

However, what you may not realize is that some investment con artists rely on convoluted pitches, vague promises, and “fine print” to drag you into a scam—and some of the newer investment products are so complicated that many brokers or advisors may not understand how they work! 

Making Sense of a Complicated Pitch

If there are so many complicated pitches out there, how can the average investor make sense of these complicated investment pitches and avoid investment fraud? Here are a few tips for dealing wisely with complicated investment products or strategies:

• Ask questions until you understand how the investment or investment strategy works. If you just can’t make heads or tails of it, you might want to skip it. 
• Check out the investment and the promoter through Google, FINRA's BrokerCheck, the BBB website, and the SEC’s EDGAR database. 
• Review the investment offer with a third-party financial professional of your own choosing. 
• Find out how your broker or advisor will be getting paid, and look for any unusual commissions or fees. 

If you have lost money on an investment and suspect you’ve become the victim of investment fraud, please reach out to an experienced investment fraud lawyer for guidance today. You can reach the Law Firm of Meyer Wilson today at 1-866-8-BROKER (1-866-827-6537) or by filling out the confidential online contact form on this page.