Red flags that could indicate securities fraud


Securities fraud can leave you with nothing. If you have been saving up for a lifetime and are getting ready for retirement, it can be devastating to be the victim of securities fraud. Investors may be able to protect themselves by watching out for red flags that may indicate securities fraud.

Unreasonable guarantees

One potential sign of securities fraud is an unreasonable guarantee.  It is not possible to honestly make a guarantee that an investment will perform in a certain way, as all investments carry some level of risk.

In addition, overly consistent returns may also be a warning sign. An investment that increases every month despite market conditions may be too good to be true.

Questionable sales techniques

Investors should also be on the lookout for complex strategies that are difficult to understand. If the person offering the investment cannot describe it effectively, this may be a sign that something’s wrong. Investors should beware of pushy salespeople who make them feel pressured into an investment. Investors may want to check if their securities dealer is licensed.

Missing documentation

It should raise concerns if documentation is missing. Account discrepancies may be another warning sign, especially if there are unauthorized trades, missing funds or other problems with account statements or missing information.

For victims of securities fraud, different options and relief may be available based on the specifics of the circumstances. Because these situations are oftentimes complex and so much is on the line, it’s important for victims to seek out help from attorneys who have experience representing victims of securities fraud.