Protecting Yourself From Investment Fraud
Learn to recognize investment fraud , plus identify investment fraud lawyers with proven experience in stock market manipulation cases, broker-dealer malfeasance and more.Investment Fraud Versus "Hot Deals"
Investment fraud creates victims daily as the American free enterprise system creates an endless stream of business opportunities and "hot deals".
* Getting The Best Legal Advice. Investment fraud lawyers can advise you on remedies in the event that you become a fraud victim.
In order to avoid becoming an investment fraud victim, you need to form a framework of useful references by which you evaluate a money situation.
* "This Deal Is Too Good To Be True". The investment fraud bad guys hype the situation – such as a new stock offering or IPO – explaining how you'll make high yield returns, yet not bear the sort of risks generally associated with those same high returns. In a nutshell, investment fraud relies on the victim failing to take measures to check the reasonableness of the deal, or to carry out prudent due diligence in order to verify facts and assertions.
* Use Your Experience And Knowledge To Guide Investing. To avoid becoming a victim of investment fraud, you need to consider whether you have knowledge or expertise in the subject industry where your money will be invested. If not, then slow down and re-consider the potential not only for loss of capital, but investment fraud.
Deal promoters pushing an investment fraud situation rely on investor ignorance of the underlying deal or business, a failure to undertake verification of facts and figures, and susceptibility to being pressured and rushed into executing deal commitment documents.
A typical "indicator" of potential investment fraud lies in the area of risk-rewards, where high returns are promised or inferred without a proper statement of risk to the investor's capital.
* How The SEC Aims To Protect You. Since tens of thousands of instances of investment fraud occur annually, and seem to be ongoing parasites within all economies, investors need to be disciplined when considering capital investments.
The Securities and Exchange Commission or SEC acts in a regulatory capacity to provide rules regarding the nature of publicly traded stocks and bonds, however battles to limit investment fraud carried out by the management of even the largest businesses.
Example Of Lucent. Take for example the investment fraud and settlement by Lucent with the SEC in 2004. Following allegations of investment fraud, the SEC moved against Lucent and it alleged 20% per year growth target which it used to hype its stock to unsuspecting investors during the waning days of the telecom stock boom.
In sharp contrast to Lucent's revenue claims, the reality was calculated investment fraud based on 10 instances of hidden side agreements, false document information and questionable internal operating and financial accounting controls.
True to the market preference for "form over substance", the telecom gear maker denied nor admitted wrongdoing, however agreed to pay a $25 million fine and agreed to refrain from future securities violations, all of which is corporate double-talk for an admission of investment fraud.
* Most Fraud Occurs In Deals Less Than $1,000. Investment fraud lurks as a potential deal factor in the smallest transaction, private deals between small investors with sums below $1,000. "Investor beware" is your best guide to managing your capital and avoiding losses and embarrassment associated with investment fraud.
If you believe that you've become a victim of investment fraud, then you should prepare all relevant records reflecting your investment, names and addresses of the selling party or agent, and then contact a reputable securities fraud lawyer to review your situation.
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