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¿Qué es el fraude en las inversiones?

Investment fraud is deception that causes investors to lose money on misrepresented, worthless, or unsuitable investments, often disguised behind the promise of strong returns. Sadly, it’s all too common in the investment world.

Securities and investment fraud covers both intentional schemes and the negligent broker misconduct that drains your account over time.

Every registered financial advisor owes you a fiduciary duty, meaning they have a legal obligation to put your interests ahead of their own commissions. Brokers and investment advisors are held to this same basic standard of trust. When a financial professional ignores that duty and steers you into investments recommended for their benefit rather than yours, they have breached the trust. When that happens, you have a legal right to recover what was unjustly taken from you.

Don’t worry, federal securities laws exist to protect investors from this exact harm. The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority oversee brokers and broker-dealers across the financial industry. When those firms fail you, whether on stocks, variable annuities, or any other product, the law gives you a path to recover losses.

Types of Investment Fraud

The most common types of investment fraud share one trait, which is that your money ends up serving someone else's interests instead of your own. If you suspect your broker has committed any of these illegal acts, you may be entitled to compensation.

Unsuitable Investment Recommendations

Unsuitable Investment Recommendations

Unsuitable investments are recommendations that ignore your risk tolerance, financial goals, or stated investment objectives. A retiree pushed into volatile speculative products is the classic example of a suitability claim, because the recommendation never fit the investor in the first place. Brokers are required to match the investments recommended to your investment experience and needs, a duty that FINRA suitability rules govern directly. Más información

Churning and Excessive Trading

Churning and Excessive Trading

Another common type of investment fraud is something we call churning. Churning is when there's excessive trading in your account made to generate commissions for the broker rather than returns for you. This is another all too common financial crime in our industry, and one our law firm litigates on a regular basis. You can typically spot churning by looking at turnover ratios and commission-to-equity ratios. If you suspect your advisor is churning your account, we recommend getting a trained eye to look at your statements and provide their professional opinion. These investment fraud cases erode account value through repeated transaction costs, which is why churning is sometimes called excessive trading. Más información

Comercio no autorizado

Comercio no autorizado

If your broker places trades in your account without your permission, that is considered unauthorized trading. Unauthorized trading includes any transaction made outside the limited authority you granted your advisor, even when the broker believes the trade was a good idea. If you hold a non-discretionary account, you have strong legal rights against this kind of broker misconduct, unless a margin call gave the firm limited authority to act. Again, we cannot know for sure without speaking to you first. Más información

Misrepresentation and Omissions

Misrepresentation and Omissions

Misrepresentation occurs when a broker distorts or hides material facts about an investment. Common examples include understating the real risk, overstating projected returns, or omitting the fees buried inside a product. Failing to disclose conflicts of interest also counts as securities fraud, including undisclosed commissions on high-risk products such as bond funds and junk bonds. A single omission of this kind can turn a routine recommendation into a serious financial loss. Más información

Esquemas Ponzi y Piramidales

Esquemas Ponzi y Piramidales

Ponzi and pyramid schemes are among the most well known financial crimes. We're sure you remember the Bernie Madoff scandal from earlier this century. A Ponzi scheme pays earlier investors using money collected from newer ones, which creates the illusion of a profitable enterprise. And pyramid schemes work in much the same way, relying on a steady stream of new recruits to keep the payments flowing. Both structures eventually collapse and wipe out the remaining investments once recruitment stalls. Ponzi schemes are no laughing matter and FINRA takes them very seriously. If you believe you've been a victim of one, contact us immediately. Más información

Overconcentration

Overconcentration

Overconcentration means too large a share of your portfolio sits in a single security, sector, or product type. This is not an investment best practice and could lead to serious losses. At the very least, this could constitute broker negligence (but we can't know for sure until we review your case). Proper diversification protects you against avoidable losses when one holding falls, which is why brokers should spread risk. This failure exposes individual investors to risk far beyond the broader market, and it is a recognized breach of fiduciary duty. Más información

Vender fuera

Vender fuera

The last common type of investment fraud we litigate is called selling away. Selling away is when a broker sells you an investment outside the brokerage firm's oversight and approval process. These deals frequently involve unregistered securities or private placements that never passed through any compliance review. Broker dealers are required to supervise their representatives to prevent this, and firms can be held liable when their supervision fails. Más información

Why Choose Robert Wayne Pearce as Your Investment Fraud Attorney?

We know you have many options for your investment fraud attorney, but at the law firm of Robert Wayne Pearce, we have over 45 years of securities law experience with $185 million recovered for defrauded investors and a 99% success rate.

Attorney Pearce has experience litigating every type of investment fraud case there is, including Ponzi and pyramid schemes, unsuitable investments, churning, and unauthorized trading.

If you have been the victim of fraud, rest assured that we will fight tirelessly to recover everything you have lost and more. The reasons people choose to work with us include:

  • 45+ Years of Experience: Robert Wayne Pearce has handled investment fraud cases for over four decades, giving our firm an inside understanding of how brokerage firms defend themselves.
  • $185 Million Recovered: Our firm has recovered $185 million for clients harmed by investment fraud across the country.
  • 99%+ Success Rate: Mr. Pearce has recovered funds for over 99% of his clients through court litigation, arbitrations, and settlements nationwide and internationally.
  • 200+ Cases Tried: Attorney Pearce has tried over 200 cases to trial verdict or arbitration award, with only 4 losses for clients in his career.
  • No Fees Unless We Win: We represent clients on a contingency basis, meaning you pay nothing unless we recover for you.

How Does FINRA Arbitration Work for Investment Fraud Claims?

FINRA arbitration is the forum where most investor disputes get resolved, and it usually takes the place of traditional securities litigation in a courtroom.

Brokerage account agreements almost always require this route instead of civil litigation, because investors typically sign a pre-dispute arbitration clause when they open the account. Filing a claim here is still a formal legal claim, just heard before arbitrators rather than a judge.

The arbitration process is generally faster and less formal than a courtroom trial, while still giving both sides the chance to present evidence to neutral arbitrators. You and your investment fraud lawyers file a claim, the brokerage firm responds, and the panel reviews the full record before deciding whether the firm should repay your investment losses.

For you, this means you need an attorney who is experienced in FINRA arbitration processes, because this is a highly specialized forum. It is not your typical courtroom. It has its own rules, procedures, and legal standards. For example, there are no judges or juries. And decisions are final and binding!

Timing here is strict, so you should not wait to act. Investors have six years from the date the misconduct occurred to bring a claim, a deadline the Financial Industry Regulatory Authority sets and enforces closely.

What Damages Can You Recover in an Investment Fraud Case?

The damages available in an investment fraud claim depend on the facts of your case and the forum where it is filed. We can never guarantee any type of compensation, but we can say that we have recovered six and seven figure settlements for clients in the past. However, your level of compensation depends on the specific facts and circumstances of your own case.

We understand how frightening it feels to watch years of savings disappear, and you may be worried that the money is simply gone for good. But we want you to know that a securities arbitration claim can return more than your initial losses. In cases of egregious broker misconduct, the panel may even award punitive damages meant to punish intentional wrongdoing.

A securities arbitration lawyer evaluates which categories apply to your situation and how to present them for the strongest recovery. The recoverable categories in these investment fraud cases include:

  • Net out-of-pocket investment losses

  • Market-adjusted losses measured against a properly managed portfolio

  • Excessive fees and commissions you paid

  • Pre-judgment and post-judgment interest on your losses

  • Attorney fees and costs in certain cases

  • Contact Our Experienced Investment Fraud Attorneys Now for a Free Consultation Obtenga una consulta gratuita
Reach Out to an Investment Fraud Attorney to Get the Help You Need Today

Reach out to an investment fraud attorney today to begin your financial recovery and protect your legal rights. The Law Offices of Robert Wayne Pearce, P.A. serve investors in all 50 states, including California, Texas, New York, and Florida. Or, if you need an investment fraud lawyer or counsel in another state, we have an office there too. We work to protect our clients rights on a contingency fee basis, so a free consultation costs you nothing. Call (800) 732-2889 for your initial consultation and let our investment fraud lawyers go after what you lost.
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Preguntas frecuentes

Do I have to use FINRA arbitration, or can I sue in court?

Our firm works on a contingency fee basis, so you owe no attorney fees unless we recover for you. Your first consultation is always free.

How long do I have to file an investment fraud claim?

FINRA sets a six-year eligibility window from the date of the misconduct. Shorter state statutes of limitations may also apply, so contact an attorney promptly.

What evidence helps prove investment fraud?

Account statements, trade confirmations, account opening documents, and written communications with your broker are strong evidence. Internal firm records obtained in discovery often prove decisive.

How much does it cost to hire an investment fraud lawyer?

Our firm works on a contingency fee basis, so you owe no attorney fees unless we recover for you. Your first consultation is always free.