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STOCK FRAUD
Perhaps one of the most frightening aspects of today’s investment scene is to realize that although you believed that your registered representative was working and advising you and keeping in mind your investment goals, with safety as your principal goal, you can still lose some or most of your hard earned money. Most of the time your repeated inquiries are met with platitudes from your broker that, well, it’s the market and there is nothing that can be done. You should realize that it is difficult to get your money back from a loss in the stock market. First of all, your broker or advisor can make bad investment decisions and this does not constitute securities fraud. For a securities fraud case to be actionable, you must have a misrepresentation or omission to state a fact that was necessary for you to make an informed investment decision. You must then rely upon this misrepresentation and you must suffer actual damages.
Many people have worked their entire lives, only to lose it through a broker’s ill advised purchase of bad investments, or worse yet, through products that were an actual fraud. Some banks and investment houses produce proprietary financial products that are not safe, and for which a very limited market exists. They sell these products because they want to off load certain investments they no longer desire to hold onto, and to earn substantial fees when they sell these products to their clients. A good example of this kind of investment are those products known as Auction Rate Securities. Many of the large investment firms did not disclose to their customers that in fact no true auctions existed for many of these securities. Indeed, some of these firms stepped up its sales campaign to investors even as large corporate cash managers were turning away from auction rate securities and the investment bank’s own inventory was swelling. Many, many banks are caught up in this Auction Rate Securities debacle. This multi-billion dollar market collapsed in the beginning of 2008. There are allegations that these large banks, investment firms and financial institutions encouraged their individual investor clients to cash in their CDs or money market accounts, because there was no risk in something called auction rate securities. However, the investors now cannot access their funds and allege they were not informed that these were not cash equivalent investments, similar to money market accounts.
A loss of your investment in a public company or fund is not the only way you could have a securities fraud case. You might be an investor in a private company. In fact, you might have purchased stock or partnership interests. Or you might own an interest in an oil and gas lease. If you believe you were lied to about your investment, whether it was for your retirement funds or otherwise, please call Bonnie Spencer at The Spencer Law Firm at our toll free number, 1-888-237-4529.