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Warning signs of investment fraud that seniors should know

Navigating the world of investing can be complicated. For every legitimate investment opportunity, there is a multitude of scams. It is all too easy to misplace your trust and fall victim to investment fraud.

Senior citizens are at a particularly high risk for investment fraud. Because seniors are not always as technologically savvy as their younger family members, they are frequent targets for scams. To help combat investment fraud among senior citizens, the Security and Exchange Commission's Office of Investor Education and Advocacy has compiled a short list of investment fraud red flags that seniors should know about.

Regulations may halt the cryptocurrency craze

The thought of virtual money is obscure, but not entirely unfathomable. Like stocks and similar investments, you can purchase and sell cryptocurrencies such as Bitcoin or Ethereum that have slightly unusual properties. Many older investors are curious about whether to enter the market. However, economists and market observers have a few new concerns.

On this blog, we previously discussed how people sold fake cryptocurrency investments to Baby boomers. Governments around the world have begun to notice that this kind of behavior is placing investors at risk. These virtual coins, given their newfangled status, have not faced regulation like established currencies, but that may soon change.

Puerto Rico investors face large losses after Hurricane Maria

Although Puerto Rico’s economy was struggling before being ravaged by Hurricane Maria, the aftereffects are impacting the investment market in waves.

In May 2017, Puerto Rico claimed bankruptcy. The island had long struggled financially and owed over $70 billion dollars in bond obligations. In addition to the bond debt, Puerto Rico has $49 billion dollars in unfunded pensions in near insolvency. The debt Puerto Rico has amassed represents close to 70 percent of the island’s gross domestic product (GDP), whereas in the U.S. the average debt-to-GDP ratio is only 17 percent.

Fraudulent hedge fund manager released from Canadian prison

Fraudulent hedge fund management is a serious problem. While there are entities in place to help prevent and prosecute fraudulent brokers and firms, there is often little recourse for victims who have suffered financial losses from hedge funds because they are not required to register with the SEC.

 

Filing a complaint with the SEC

You did your research and thought you found a favorable investment opportunity, but then things go south quickly. In the aftermath, you begin to suspect fraud or misrepresentation. What recourse do you have?

The U.S. Securities and Exchange Commission (SEC) exists to protect investors and maintain fair markets. If you feel your broker misrepresented investment information or even committed fraud, you can file a complaint with the SEC.

Passing The Buck On False Statements

Brokers who sell investments based on false information may very well find themselves facing sanctions by the SEC. That's what happened in the case of Lorenzo v. SEC. In this case, a broker was accused of sending potential investors emails that contained false information to solicit investment in Waste2Energy Holdings, Inc.

Who "made" the statement?

The lawsuit held when the broker had sent false information to the investors, that he had violated Rule 10b-5(b) of the 1934 Securities Exchange Act, which prohibits "making" false statements in securities transactions. In this case, however, a judge ruled that the false statements did not originate with the broker himself, but with his boss. His boss had created (or, "made") the misleading information, which was passed along to investors by the broker. 

Baby Boomers, blockchain and boiler rooms

As an investor, you are always looking for a new market or a piece of information that will give you a competitive edge. When discovering new information on the latest opportunities, you are rightfully skeptical of some and seize upon others. The integration of technology in our daily routines has opened up a new realm of possibilities in both our professional and personal lives, but with that, a new field of risks too.

What risks are emerging for investors in online markets?

Puerto Rico: USB brokers lose arbitration case

Puerto Rican brokers have been in the news for failing to ethically invest on their clients' behalf. Most recently, Investment News reported that two claimants were awarded $793,077.61 by UBS. They charged UBS Financial Services and UBS Financial Services of Puerto Rico with a number of investment violations after the clients purchased municipal bonds with them. These violations include: misrepresentation, negligence, failure to uphold their fiduciary duty and a several other ethical problems. What can you do if you suspect that your broker is not acting in your best interests?

Did your broker misrepresent investment information?

You trusted a broker to manage a portion of your money, hoping to increase your savings before retirement. However, something does not seem right. They lost a large portion of your investment, but they did not give you a satisfactory answer as to why. It may be time to take a deeper dive into your investments, and make sure that everything is in order.

When a broker loses a substantial amount of what you believed to be a relatively safe investment, check into the possibility of misrepresentation.

Madoff Is In Prison, But His Victims Haven't Seen A Penny

Bernie Madoff is in prison, serving a 150-year sentence after pleading guilty to numerous felony charges for bilking investors out of billions of dollars. However, just because the drawn-out criminal case is over does not mean the matter is resolved. Far from it.

According to an article from Forbes, victims of Madoff's scheme have yet to receive any money from the $4 billion fund set up to repay them 5 years ago.

Contact A Manhattan Investment Fraud Lawyer With Extensive Experience

For a free consultation with an experienced New York City securities litigation lawyer, contact the law firm of Timothy J. Dennin, P.C., by calling 866-437-9475.

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