Brokerage firms have a responsibility to enforce safeguards that protect their customers from broker fraud, account breaches, and unauthorized transactions due to identity theft.
Investment Fraud and Identity Theft
Investors are often victimized by various types of broker fraud schemes, as well as identity theft by outside perpetrators when brokerage firms fail to adequately protect their investments. Although SEC regulations and FINRA rules are in place to require brokerage firms to protect their investor’s information, some firms fail to provide adequate protection, resulting in millions of dollars in annual losses for investors. Unfortunately, unethical brokers misappropriate investor funds for personal gain. In many cases, brokers sell investments by lying to their customers in an effort to secure money, then they divert the money to their own personal accounts.
According to the SEC, recent charges were filed against a broker who stole investor funds with the help of an outside representative who allegedly facilitated the sale of a company to a friend, received a fee for his services, then helped himself to investor funds in a corporate pension plan. Identity theft is a common tool used by unethical brokers who tap into investors' retirement accounts and pension plans. Perpetrators often use an investor's personal identification information to access secured accounts. They change email addresses and phone numbers linked to the account, so they can steal funds without raising suspicions.
In one case of identity theft at Invesco Distributors, the perpetrator successfully stole over $100,000 from the investor's 401k account, took out a loan against the account, and transferred the money to his personal bank account without the investor's knowledge.
Unfortunately, the unsuspecting investor had no knowledge of unauthorized transactions. He was never contacted by Invesco Distributions about suspicious activities on his account. He found out about the stolen funds from identity theft and the penalties paid to the IRS only by checking Invesco's account portal. As a result, the investor filed a claim against Invesco Distributors for failure to safeguard his assets according to the SEC regulations, securities laws, and FINRA rules.
Invesco Distributions Inc., a Texas-based brokerage firm, handles money market funds, mutual funds, exchange-traded traded funds, and other retail products. They are a FINRA registered broker-dealer and required to comply with SEC laws and regulations and FINRA rules.
Investment fraud and theft takes millions from investors. For information, contact the attorneys at Meyer Wilson at (800) 738-1960 for a free consultation.