The security industry involves a number of different forms of investments, such as mutual funds, bonds, stocks and much more. While these types of investments can be quite different, as securities they all involve investments made by entities and individuals with an expectation of yielding profits. Federal laws are in place to protect people and their investments from abuses, but unfortunately securities fraud and other abuses still take place.
New York companies that issue securities are required to disclose information that affects the value of investments. However, if a company files documentation that does not accurately reflect those values, makes inaccurate financial claims or engages in improper accounting practices, then it may have committed fraud. Investors who are misled by this type of fraud often sustain significant financial losses.
Abuses can also occur when an investor works with a broker, who is supposed to provide suggestions and services based on an individuals wants and needs. Unauthorized trading is just one example, and involves a broker making trades without authorization or direction from the investor. Misleading an investor on the merits of an investment or recommending an unsuitable investment are also examples of securities abuses.
Profits from securities make up a significant portion of some New York residents’ incomes. When securities fraud or abuse takes place, a person’s income and sense of financial stability can be compromised. These types of damages can be severe and long-lasting, so it is important for victims to consider whether pursuing legal action could be beneficial to their unique situations.