How to Identify Securities Fraud

Many fraudsters solicit investors via unprompted means, including mass emails or Internet postings touting their fraudulent offerings. If you come across an offering in a mass email or online posting for which you are unable to find additional financial reports from third parties, the offering may be fraudulent.

Any offering made with guarantees of returns could be investment fraud. These promises could be either guarantees of high returns or guarantees of consistently scheduled returns. If an equity investment is promised to provide returns at a certain rate despite normal market fluctuations it could be a Ponzi scheme and you could have cause for concern.

If obtaining clear information about your investment is difficult, including investment contracts, account statements, proof of the investment’s registration, or proof of the seller’s security licensing, the seller may be attempting to conceal an improper scheme, such as a Ponzi scheme.

Brokers or advisors should not pressure you into making immediate decisions about your investments. High-pressure tactics can be used to perpetrate investment fraud. Even with legitimate investment opportunities, they are improper.

The broker’s activity in your account may not be in keeping with your instructions, and unauthorized trades, missing funds may exist, as well as high risk investments. Discrepancies could be evidence of churning, selling away, negligence or other types of investment fraud.