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!