Individuals with money to invest sometimes find the wrong place, person, or entity in which to seek a return. Oftentimes, consumers can be duped by a potentially good opportunity, but which is not based on any true profitable future going forward. Provided the consumer has information on the individual that has defrauded him or she into investing into an unsuccessful venture, the consumer can retain a New York City investment fraud lawyer to proceed against that person in arbitration and/or Court to prove deception, fraud or breach of contract.
Ponzi schemes are an example of such investment fraud where a consumer is enticed into investing with the entity under a promise of higher than average returns than other, even speculative, investments. The investor is lured into a false sense of security by receiving all or part of the promised return, never knowing that the underlying capital has been squandered. However, investment fraud comes in many different flavors and by many different actors.
Real estate has been a popular context for investment fraudsters, and even beyond the bursting of the housing bubble and the crash of the U.S. housing market from 2008 onward. Real estate remains a popular place to park one's investment money, and can be a good and stable source of income for an investor. However, if left up to managers, brokers or others who have not done proper due diligence, or perhaps intentionally not disclosed information to their clients, a consumer investor can suffer the same devastating fate of any victimized investor: significant loss of principal, upon which consumers' retirement and/or life savings may be based.
Investors often retain financial advisors to manage their investments because they lack the expertise to conduct them on their own. Our New York City investment fraud attorneys recognize that consumers place their trust and money in a broker who has a duty to serve their interests. Consumers of investment advisor services must be so diligent to avoid wrongdoing or other betrayal of a client’s confidence. Misconduct by a broker or other financial advisor can be pursued to recovery from a responsible party.
The securities industry is well-regulated mainly by federal regulatory and enforcement agencies. The Securities and Exchange Commission (SEC), has set forth guidelines for brokers in conducting investment transactions. Investment advisors owe their clients a fiduciary (trust) duty in managing their money. Soe duties might seem obvious but advisors should have full disclosure with their clients, charge reasonable market rates for their services consistent with that prevailing in the industry, avoid conflicts of interest, and follow the client’s reasonable directions.
Investment Advisors do not operate in a vacuum, the SEC and private entities publish Best Practices guidelines. In summary, an investment advisor is a “fiduciary” to his/her clients. Much like lawyers, they have basic duties to act in a client’s best interest and in loyalty and good faith, and not operate under a conflict of interest. A breach of these duties can be mere negligence, but can rise to the level of fraud.
Advisors’ first consideration for their clients should be risk tolerance, and plunging a client’s resources into a suitable investment vehicle(s). The fiduciary duty of a broker requires acting in the best interests of the individuals whom they serve. He or she cannot carry out a transaction solely for the purpose of making a commission, or even take that factor into account when advising an investor.
Lawsuits against investment advisors can only be brought by an experienced investment fraud lawyer. As the epicenter of the investment world, claims of this nature are rampant in New York City and Long Island where we practice. Claims arise under federal and state law and can involve fraud, negligence or both. Fraud involves intentionally false statements with the intention for the investor to rely on the statements to relinquish his/her funds. In the lawsuit, the investor must prove actual reliance, and that the advisor’s conduct caused the loss.
The Kupillas, Unger & Benjamin, LLP files and defends Investment Fraud claims New York City’s five boroughs, including New York, Brooklyn, Queens, Kings, Bronx, Staten Island (Richmond ) counties, Long Island’s Nassau & Suffolk Counties, Westchester, Orange, Rockland and certain up-state New York counties.